Oregon’s SoloPower: Another taxpayer-backed green energy program about to go bust?

Fox News reports on a story we’ve heard all too often the last several years – about the failure of a taxpayer-funded “green energy” business to the point of having to lay off workers due to poor sales/structure (bolded emphasis added by me):

When Solyndra went bankrupt and cost taxpayers up to $530 million, the Obama administration’s green energy loan program was subjected to congressional hearings and became an election-year issue. Now, another solar panel company may be headed for a similar fate.

SoloPower, which makes thin-film solar panels at a new plant in Portland, Ore., opened Sept. 27 with an upbeat ribbon-cutting ceremony. Local and state politicians gushed about the company eventually operating four production lines and creating 450 well-paid green jobs.

Just a few months later, those predictions, and SoloPower’s future, are on shaky ground.

The first production line was never completed. In January, the company had a round of layoffs. SoloPower won’t say how many of its 60 employees received pink slips.

A management shakeup soon followed — gone are the chief executive, president and chief  technology officer. The company is now trying to raise money by selling some of its equipment through a third party and is attempting to restructure its $197 million federal loan guarantee.

Has this failure to even partially live up to expectations caused the once-gushing Oregon state politicos – most of them Democrats – to have second thoughts about investing even more tax dollars in SoloPower? Of course not:

Despite the warning signs, the state of Oregon is continuing to put taxpayer money at risk. In December, the agency Business Oregon issued SoloPower a $20 million tax credit. The company sold the tax credit for $13.5 million in cash.

In order to secure the money, SoloPower had to employ 39 people and convince bureaucrats that it would still be in business in five years. The state is not giving up hope.

Solar industry analysts are not optimistic. The same economic factors that took down Solyndra and a host of other U.S. solar companies still exist. A glut of cheap solar panels on the worldwide market has driven prices so low, U.S. companies with their higher production costs can’t compete.

The former mayor of Portland seems to suggest the answer is more help from U.S. taxpayers.

“They survive by downscaling and being responsible with the resources they have,” said Sam Adams, “by reducing costs and being able to wait out, hopefully, until Congress passes new energy tax credits.”

The city of Portland issued SoloPower a $5 million loan along with other tax incentives. All told, the state and local investment is $58 million.

First things first: Since taxpayers helped foot the bill here, why isn’t SoloPower required to notify the public as to exactly how many layoffs they had last month?  This is basic information about the company’s financial operations that I believe the public should have the right to know.

Secondly, would someone pretty please lure Democrat advocates of government-funded green energy companies to one big giant room – complete with a dinner consisting of tofu, arugula,  and water served in stainless steel containers – and explain to them, make them repeat it out loud over and over again, how “tax incentives” are supposed to work as it relates to attracting business to their respective states?  The Oregonian gets it:

The economic principles are simple. The market, not government, picks winners and losers. Emerging industries are riskier than established ones. And it’s harder to succeed in a shrinking economy than in one that’s growing.

So, why did government officials rush to invest in emerging green industries amid one of the worst U.S. recessions?

Starting in 2009, green companies found an ideal political climate as they sought to expand. Concern about global warming was mounting and Democrats controlled the White House after eight years of oil-friendly energy policies under President George W. Bush. Meanwhile, the financial and housing collapse devastated the U.S. economy and put policy-makers in a mood to embrace the “next big thing.”

So governments at all levels hugged solar companies. And for a brief period the U.S. solar industry bloomed. Then it wilted. Solyndra, which received a federal loan for a California plant, filed for bankruptcy. SolarWorld, which received state and local tax incentives for a factory in Hillsboro, began bleeding jobs. SoloPower struggled to fulfill its promises in Portland, as detailed by The Oregonian’s Molly Young.

To be sure, government should encourage economic development. Sometimes, that requires incentives — including tax breaks. But incentives must be widely available and awarded based on potential for success, not based on non-economic policy agendas. Otherwise, the government is using taxpayer money to speculate.

Any questions?

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