Solyndra has been  the most hyped startup in the crowded Solar Energy field .It is not due to a lack of competition,another thin film player Nanosolar has been in the news with heavyweights like Google,Carlye and EDF backing it.Then there are other startups like eSolar, Brightsource  Energy,Miasole which promise to drastically improve the adoption of solar energy.But Solyndra has been singularly successful in marketing itself as the solar startup to watch out for, filing a prospectus do an IPO in 2010.It has received more than a Billion Dollars in Equity funding from its PE investors and Millions of Dollars in Loan Guarantees from the US government through Department of Energy (DOE).These huge amount of dollars are going to be a huge waste IMHO

Solyndra’s Scale is too Small

Solyndra’s  Capacity will be 85 MW by end 2010 and 500 MW by end 2013 .Compare this to  the Gigawatt scale capacity  being built up by many of the Chinese,European ,Japanese and Taiwanese players in 2010 itself.By 2013 , Solyndra will not even rank in the top 20 of world’s top suppliers . Leading Companies like Trina Solar , First Solar ,LDK will already have a capacity of more than 2 GW by 2011

Solyndra’s capex per Watt is too high

Solyndra’s 500 MW plant will require $1.38 billion to be built according to its S-1 filing .This works out to be more than $2.5/watt ,compare this to $1/watt capex required by First Solar to build a similar plant.Even crystalline solar plants which have much higher efficiency require almost half the capex dollars to build a similar size capacity

Solyndra’s Huge Accumulated Losses

Solyndra has accumulated more than$500 million in deficit making even its Auditor PWC has questioned its survival as a Going Concern

Solyndra’s products are not Cost Competetive

Solyndra’s S-1 filing with the SEC shows that its cost structure is too high compared to the mainstream crystalline solar energy technology.Its costs are also much more than the Cadmium Tellerium (Cd-Te) technology used by solar energy market leader First Solar . Solyndra’s cost per watt is currently more than $4/watt ,compare that to Trina Solar which has a cost per watt of $1.1/watt at much higher efficiencies.It would take a major miracle to reduce this vast cost gap.

US solar energy policies are misguided

Existing US Solar companies with state of the art technology like Evergreen Solar,Energy Conversion Devices and Sunpower are barely surviving due to lack of US govt support while President Obama is visiting a fledgling startup.Evergreen Solar lamented the lack of US govt support as it moved its manufacturing operations lock stock and barrel to China.Sunpower is constructing its next big Fab in Malaysia in partnership with AUO while Energy Conversion Devices is running at 50% utilization .Its questionable why DOE is giving a $535 million loan to Solyndra and not to these companies with proven technologies and plants.Note China is giving huge subsidies to its solar companies in the form of billion dollar credit lines,electricity subsidies and even taking equity stakes.These incentives have made the China capture 50% of the world market from less than 5% in 2005.US needs to show similar commitment to its solar companies to regain its lost leadership in the clean energy race.

The United States could fall behind China and other countries in clean energy technology unless Congress passes energy legislation, U.S. Commerce Secretary Gary Locke said on Saturday– Reuters

While the Commerce Secretary is “only thinking” that the US could fall far behind ,The Reality is that US is already far behind in the Solar and Wind and is at risk of falling behind in the other newer sectors of the Green Industry as well.

USA is far behind China in Solar

USA has fallen far behind China in solar manufacturing despite Silicon Valley being the hotbed for technology innovation in solar . If it was not for First Solar, no US company would figure in the top 10 rankings by 2011 as the Chinese and Taiwanese use their low cost and processing skills to tighten their grip on the world market. Numerous startups like Miasole,Nanosolar,eSolar are in the process of moving from pilot to commercial production but the support from the government does not measure up . Evergreen Solar has  given up on the US and shifted its manufacturing base to China  while other technology innovators like Energy Conversion Devices are on their “deathbed”.Sunpower and First Solar the other major companies are trying to compete by expanding their facilities in Asia, retaining only a  token presence  in the US (less than 10% of their future capacity will be located in the US). Technology giant Applied Materials has shifted its manufacturing and R&D base  to China as well. While all this is going on, US continues its petty politicking over the climate bill which ironically has support for “offshore drilling”

In Wind US is in a more pathetic condition

Except for GE , US does not have a single company in the top 10 turbine makers for wind. There does not exist a single large pure play wind turbine maker in the US. Despite US being the world’s largest wind market in 2009 , US hardly manufactures even 10% of the world’s wind turbines.In contrast Chinese wind makers like Sinovel,Goldwind ,APower are planning big foreign expansions making the dominant European companies like Vestas  go into the red.

Energy Efficiency,Storage and other forms of Renewable Energy a  Saving Grace

In the still nascent markets of Energy Efficiency ,Energy Storage and other forms of renewable energy like geothermal ,tidal ,biomass and nuclear energy the US still leads along with Europe, but the Chinese government has been proactively seeking investment in these areas as well. Its a matter of time that once these technologies cross the early adopter curve, companies in Asia will actively look to attain leadership here as well.Innovative companies like Ormat, Comverge,EnerNoc , Johnson Controls,A123 systems still give the leadership to the US in these areas.But unless they are given more government support and subsidies , you can see them moving off to Asia like the solar and semi companies like Evergreen,Applied Materials.

Summary

US is still the leader in technology innovation and R&D in the green technology area,however it is way behind in the manufacturing area.Its only a matter of time that the Asian countries develop the technology once they move further along the experience curve.Companies in the US like IBM,Applied and others have already shifted a large part of R&D to these countries.Unless US soon implements on  a coherent long term policy to mitigate climate change and develop clean energy , it would fall too far behind to matter at all