Solyndra Is Symptomatic of a Larger Obama Energy Problem

Solyndra is a symptom, not just a problem.

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United States Secretary of Energy Steve Chu did not exactly distinguish himself while testifying before the House Energy and Commerce Oversight Subcommittee about Solyndra, the so-called "green energy" company that received more than half a billion dollars in loan guarantees from the federal government.

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That these same loan guarantees were refused by the Bush Energy Department in the waning days of that administration is only part of the story. That Solyndra is connected to major Obama donors and was permitted by the government to undertake a restructuring that allowed for private investors to be paid back before the U.S. taxpayers when the company went bust has made matters worse—and certainly increased interest in what happened—but that too is only part of the story.

There are lots of people in Washington who have identified Solyndra as part of a regime based on "crony capitalism" that has become the hallmark of the current administration. If that were all there was to it, things would be reasonably simple to sort out. In fact what happened at this one California-based company is only a symptom of a larger problem, one that threatens to grow over the next year and which reflects a fundamental flaw in the Obama energy policy: It is not based on anything reasonable.

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The rush to create "green jobs" relies on technologies that have not been fully developed, have not proven their worth in the commercial sector and which, frankly, are more pie in the sky than anything else. That is not to say there is absolutely no role for solar and wind energy in the U.S. economy, but that the emphasis on these so-called renewables has come at the expense of traditional forms of energy. It also overlooks the very real fact that, as former Bush Energy Secretary Sam Bodman used to say, the most readily abundant source of new energy in the United States is that which everyday is wasted through inefficiency.

The Nobel prize-winning Chu and his associates would do well to consider that. Rather than try to create whole new industries using the tools of "crony capitalism" they might want to focus on ways to better utilize the energy the nation already produces. They would do well to take a look at what companies like Multistack, a Wisconsin-based privately held firm does.

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Working with the U.S. Department of State, Multistack has founds ways to dramatically reduce carbon emissions, water usage, and energy costs in over 200 embassies across the globe and is currently partnering with a number of other federal agencies to assist them reduce their carbon emissions. 

"Most of the innovation in this country comes from smaller, nimble companies like ours," Multistack's Mark Platt told me. "Innovation is what will keep us competitive on the world economic stage, create the jobs we need, and gives hope to the coming generations that America's future is as bright as ever. The entrepreneurial spirit is America."

The company's work is particularly useful in data centers with critical cooling needs within the Department of Defense as well as large buildings or hospitals that have simultaneous heating and cooling needs, its literature says. Its work with the Department of State alone has saved the federal government more than $40 million over 10 years, representing nearly a 40 percent return on the taxpayers' investment, according to company figures.

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"Government has the ability to lower the hurdle rate for new technologies and shorten time-to-market (tax credits), if they choose incentivize investment, instead of adding to the risk formula for small business," Platt continued. "This has happened already in the geothermal heating and cooling market."

What Platt and Multistack have accomplished, without government subsides and loan guarantees, stands in stark contrast to the failure that is Solyndra. More than that, it may be a model for things moving forward. "It's always great when you can win on every side of a project," Platt told me. "In the case of the energy innovations that U.S. Department of State has implemented, they have won three ways:  Economically, as these technologies pay for themselves several times over during their life cycle; Environmentally, as the reduction in the use of natural gas and electricity significantly reduces the carbon footprint of the facilities; National Security, as energy independence is critical to our nations future." 

Multistack's average annual growth over the last five years has been 25 percent—with only 15 percent of its business related to the government. "It's amazing what happens when you use the heat you already own instead of burning something to create new heat," Platt said. "There is enough heat in the world. We don't have to burn anything to make new heat."

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