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Solyndra's collapse is a tale of too much dazzle

Investors were convinced that the solar company was the harbinger of an alternative-energy boom. But the market changed too swiftly.

September 24, 2011|By Ken Bensinger, Stuart Pfeifer and Neela Banerjee, Los Angeles Times

"Financial sustainability wasn't something we were required to review," said Solich, who said she toured the company in June and admitted being impressed by the high-tech robotic forklifts and other advanced machinery.

By the time it had folded, she said, Solyndra had redeemed about $25 million of the tax exemptions.

Wisconsin, too, got into the act. Last October, it served up a $3.75-million, zero-interest loan to MGS Manufacturing Group, which made plastic harnesses for Solyndra's modules. The loan was contingent on MGS creating 168 full-time jobs based on sales to Solyndra.

"It'll be difficult for us to have the number of people that were forecast" with

Solyndra out of business, said John Berg, marketing director for MGS Manufacturing.

Damien LaVera, a spokesman for the Energy Department, argued that the government made a measured decision, one based on the tremendous potential of the Solyndra technology. The PriceWaterhouse warning, for example, he dismissed as "precisely the kind of review that would be typical of a high-tech startup company."

"Solyndra appeared to be well-positioned to compete and succeed in the global marketplace," said LaVera, whose agency ultimately turned Solyndra down for a second loan guarantee, worth $469 million.

He noted that revenue increased 40% from 2009, to $140 million last year, but acknowledged that the growth was far below prior company projections. "The reason they went bankrupt is the changes in the solar market."

Solyndra spokesman David Miller, who argued that the company had a chance for success until flat solar panel prices fell even further this year, said at least two potential buyers had stepped forward.

If they don't buy, however, the transformative concept of a cylindrical solar panel could die along with the company, analysts

said.

That could leave a lot of projects in the lurch, including a 16.2-megawatt deal that Southern California Edison cut with Solyndra in mid-2010 to put its panels on 15 buildings throughout California. The project was to be Solyndra's largest ever, yet nothing was installed by last spring's deadline.

"I didn't know that the end was coming" for Solyndra, said Marc Ulrich, vice president of renewable and alternative power at the utility. But then again, he said, he wasn't too surprised to see yet another solar effort die.

"We know this market," Ulrich said. "We always assume that about 40% of these projects will end in failure."

ken.bensinger@latimes.com

stuart.pfeifer@latimes.com

neela.banerjee@latimes.com

Bensinger and Pfeifer reported from Los Angeles and Banerjee from Washington.

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