Congress Comes Full Circle in Solyndra Absurd Theater

NEW YORK ( TheStreet) -- Should the government be in the business of picking winners and losers in the clean energy race?

Congress can't seem to decide, based on the latest twist in the Solyndra hearings. The answer to this question seems to shift as a matter of whatever is most politically expedient in trying to keep the Solyndra issue alive.

With Republicans running out of ways to make the Solyndra "smoking gun" argument -- proving that the White House was just giving away money to its buddies in an act of "crony" clean energy capitalism -- Darrell Issa (R.- Calif.) will lead a new attack against Department of Energy Secretary Steven Chu when he testifies on Tuesday.

Republicans will argue that the granting of a loan to a First Solar ( FSLR) energy generation project was a violation of the congressional authorization because the technology was not innovative, according to a statement released by Issa and detailed in the New York Times.

Here's the tortured, two-faced political logic to help the reader bottom line the latest act in the absurd theater known as Solyndra.

When Solyndra went bankrupt, Republicans vented about the folly of the Obama administration trying to pick "winners and losers" in the alternative energy sector. The claim that the government should not play the role of a venture capitalist in a high-risk innovation sector was the main rhetorical thrust of the philosophical attack, that is, when the Obama administration was not being directly accused of funding the pet projects of its biggest donors.

To counter the attacks, the Obama administration and DOE officials stressed that many of the loans it made were for energy generation projects with a low-risk profile, as opposed to high-risk innovative manufacturing companies like Solyndra. The congressional testimony of DOE officials stressed that these energy generation projects, like First Solar's Agua Caliente project, ran a very low risk of default compared to Solyndra.

It was a good argument to show that some of the loans in the DOE portfolio wouldn't go the way of Solyndra. It was also a way for the Obama administration to try and move past the foot-in-mouth moment of the president standing on the Solyndra plant floor and saying how the company was manufacturing the future.

The low-risk energy generation project tack, though, is now apparently the issue for Republicans' latest attack: The DOE had no right to authorize a loan to projects that were using technology that was not innovative, and First Solar's Agua Caliente project is the proof that the DOE was ignoring the law that authorized the loans.

First Solar's thin film panels are not an innovative technology, according to Issa's statement. This much is true. While First Solar panels lack as long a track record as crystalline silicon panels in the field, First Solar panels are at this stage in the solar sector's development "yesterday's news" in the thin film technology segment.

The DOE argues that First Solar's thin film panels had not been commercially used in the U.S. at scale, and commercialization of technologies was a valid goal of the DOE loan program. In fact, the 1705 section of the DOE loan program under which most of the projects were funded was intended to allow for a mix of innovation and adoption of more mature alternative energy technologies, according to the DOE.

The truth is that arguing this point is nothing new, it's just new to a Congress that is running out of ways to keep the Solyndra story alive.

Critics of the First Solar loans -- those that actually know the clean energy sector (i.e., not the politicians) -- argued well before Solyndra went bankrupt that there was a good case to be made that First Solar should not get any DOE loans specifically because they projects were not innovative, and because First Solar could find debt financing for the projects in the capital markets. In addition, the large-scale desert projects create few long-term jobs.

As far back as July 2011, before Solyndra went bankrupt, TheStreet posed these questions that Congress is just getting to now to the then-head of the DOE loan program.

Congress, though, wasn't paying any attention to these criticisms until now, as it tries to find some other logic to keep beating this dead horse (or dog and pony show) in an election year.

Maybe Congress shouldn't be in the job of picking winners and losers in the race to use Solyndra for political advantage. It's getting old, and amid all of the rhetorical attacks, there has been very little in the way of constructive debate about the proper role of the government in setting 21st century energy policy. That's the real problem.

-- Written by Eric Rosenbaum in New York.

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