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Solar Power Business Model Unsustainable

The Obama administration has been trying to foist green industry on uninterested Americans since he first stepped in to office three years ago.  So far, the efforts have been less than successful.  The Chevy Volt has miserable sales, wind-power has proven to be something less than a viable alternative, and now it appears that reality is catching up with solar power as well.

Solyndra is a solar panel maker that was propped up by the administration having been awarded over half a billion dollars in loan guarantees.  Now, the company is going under and taking all that money and 1,100 employees jobs with it.

Solyndra, a California solar panel maker, had long been an administration favorite. Over the past two years, President Obama and Energy Secretary Steven Chu each had made congratulatory visits to the company’s Silicon Valley headquarters.

The RNC has released a video that documents the rhetoric and the reality that has surrounded this big government test case:

The reasons for it’s failure are simple enough.  Consumers simply haven’t expressed an interest in paying the exorbitant fees associated with upgrading to solar, even with the massive subsidies that are available.

But solar industry analyst Peter Lynch said that Solyndra struggled from the beginning with an imbalanced financial model. “You make something in a factory and it costs $6, you sell it for $3, but you really, really need to sell it for $1.50 to be competitive,” Lynch said of Solyndra. “It was an insane business model. The numbers just don’t work, and they never did.”

It’s pretty clear that President Obama knew that this was the case judging by how much effort he has put into shutting down the coal industry in hopes that American’s would have no other alternative but to fulfill his dreams of green industry and carbon trading.

I take no joy in a company going under, much less the loss of income for those 1,100 people that worked there.  As the real estate sector continues to struggle, banks that had received TARP are in danger of financial meltdown, publicly financed cars sit on the showroom floor with no buyers, and government guaranteed corporations with unsustainable business models go under – is it perhaps time to consider that whether it’s TARP, auto bailouts or stimulus loans, the market is much better at picking winners and losers than Barack Obama or George W. Bush?


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