As a result of a $500 million federal loan, Solyndra could hire up to 4,000 workers for its solar panel plant in Fremont. Governor Schwarzenegger is hailing the subsidy as a triumph for job creation, green energy, and Obama’s stimulus package. However, the solar market faces multiple challenges. Start up costs for solar energy companies are extremely high, and loans are difficult to obtain due to a tight credit market. Demand for solar energy may also be insufficient to produce a thriving boom due to relatively low oil prices, at least in the near-term. Finally, Solyndra may find it difficult to compete once the federal subsidy expires.
Other issues come to mind as well. By granting Solyndra a massive subsidy, the Federal Government is denying assistance and investment capital to a host of other, struggling businesses in California. Is this fair? And what about Solyndra’s competition? It will be forced to fund its own start up capital in order to compete in the energy market. Is this really fair?
And what about accountability? Do California and the Federal Government plan on implementing specific benchmarks to measure success along the way? Or, is this more of an open-ended commitment without strict oversight?