Will Solyndra's failure dim the prospects for solar projects in the United States? During today's OnPoint, Rhone Resch, president of the Solar Energy Industries Association, explains why he believes Solyndra's bankruptcy will have a minimal impact on the growth of the solar industry. Resch also discusses the politics of the Solyndra fallout and the United States' ability to compete with China on solar technology.
Monica Trauzzi: Hello, and welcome to On Point. I'm Monica Trauzzi. Joining me today is Rhone Resch, president of the Solar Energy Industries Association. Rhone, thanks for coming back on the show.
Rhone Resch: Thank you for having me, Monica.
Monica Trauzzi: Rhone, Washington's focus remains on Solyndra this week, with the House Energy and Commerce Committee taking up the issue at a hearing on Friday. How concerned are your member companies that there might be backlash throughout the industry because of what's happening with Solyndra?
Rhone Resch: You know what's interesting is although many people are talking about Solyndra, they in no way represent what is actually happening in the industry today. More people are going solar. We're employing more people than ever before. And in fact, we're exporting more solar around the world than we ever have in the history. And in fact, when you look at the second quarter of 2011, we had record growth. We grew by almost 70 percent over last year's numbers. So while Solyndra unfortunately is going bankrupt, the rest of the industry is thriving.
Monica Trauzzi: So Q2 had record growth numbers, but what are Q3 and Q4 going to show? Is Solyndra going to have an impact on growth?
Rhone Resch: I don't think so. Again, I think Solyndra is an example of a company who couldn't compete in a very competitive market. There will be other companies also that will go bankrupt. There's no doubt about it. But what you're starting to see is the industry is diversifying, having more companies who are innovating into new technologies. You've got new business models at the residential and commercial level that are expanding. So we anticipate that year on year, we'll have over 100 percent growth in the solar market in the United States in 2011.
Monica Trauzzi: How are you advising member companies of SEIA to move forward with investments and R&D?
Rhone Resch: We've got a great new story, right? We're the fastest-growing industry in the United States today. We employ over 100,000 people, which is twice as many as we did two years ago. There are over 5,000 companies in the United States in -- that work in the solar energy industry, and many of those are small businesses. We're encouraging them to get their story out there, to call your Congressman, tell them what's really going on in their districts. Call the news media and make sure that they're getting a full picture as to what's happening in the solar industry today, because I think once the facts are out there, it's going to be very hard for people to judge an entire industry based on the failure of one company.
Monica Trauzzi: But the failure of Solyndra is pretty major. We're talking about $530 million that belonged to the US government, that were -- that was loaned to this country -- to this company. There's been talk in Congress about moving away from renewable energy projects and investing in those projects. Do you think there's any merit to that? I mean, do we need to slow down and perhaps not put as much emphasis or energy behind these projects?
Rhone Resch: Monica, I'm a taxpayer, too, and I'm not upset -- I am very upset about the Solyndra issue. I mean, I think we need to do the investigations. We need to get to the bottom of this. If there was any actions that they took that broke the law, they need to be held fully accountable. But at the end of the day, the solar industry is one of the bright spots in our economy. As I mentioned, it's growing by over 70 percent in the last year. We're scaling up deploying at residential, commercial, and the utility scale level, and it's giving investment into our local economies, many of them rural, that we so desperately need. So when we step back and look at policies that not only grow the economy, but also create jobs, solar and other renewable technologies are smart investments.
Monica Trauzzi: So the other big question is, what's the future of loan guarantees? Is this -- what happened with this company going to have a chilling effect on future loans?
Rhone Resch: Well, the loan guarantee program really supports two different kinds of projects, one of which is the manufacturer who's kind of in the valley of death, trying to scale up to bring a product to market, and those are considered usually higher risk types of investments. The others are large scale projects for wind, solar, and nuclear power, giving the backing for these projects in order to raise the capital in the private sector. And so what you're seeing is these utility scale solar projects are going forward. They provide safe returns. They've got rock solid technology. And we've got about three gigawatts of projects that will commence construction by the end of the year in the solar industry alone. So the loan guarantee program has been absolutely critical to provide the financing for these projects to move forward during this tough economic time.
Monica Trauzzi: But are there issues with how the government is doling out money?
Rhone Resch: I think it's important, again, that we review the loan guarantee program to make sure it's operating as designed. And I think what you'll find is that most of the companies who go through this process are required to go through an extremely rigorous both engineering and financial review process that thoroughly vets them. They spend tens of millions of dollars just to get their projects through this loan guarantee process. So for the 41 projects that have been -- that have received loan guarantee projects so far, they've been thoroughly vetted. Now not all of them are going to succeed. I think we have to be very rational. The program is designed to take risks, to provide support to those companies who have difficulty raising money in the private sector. That is part of the innovation that occurs in this -- in these kinds of programs. But ultimately, I think the loan guarantee program is an important part of our investment in our energy future.
Monica Trauzzi: Has the administration been too bold with its investments on renewable energy, perhaps putting money behind companies that haven't proven that the technologies will be successful?
Rhone Resch: Not at all. I think if anything we're falling short compared to what our competitors are doing. Certainly in China, certainly in Europe, they're spending substantial more money in order to try to create the industry that is going to power the future. When you look at the United States and you look at the fact that solar generates less than one percent of our energy today, we need to develop a balanced portfolio. We need to make sure we're growing these industries that create jobs. And these jobs aren't just at the moment. There is innovation that is going to occur in this industry for the next 50 or 100 years. We want that innovation to occur here in the United States, not in China. And by making those investments in solar and wind and new nuclear and clean coal, we're ensuring that those industries will be created here in the United States.
Monica Trauzzi: And there is that big question of China right now. There's a concern that this essentially seals the deal for China, that they will continue to be the leader on renewable energy. What's your take on that?
Rhone Resch: Well, remember, Solyndra represented less than one half of one percent of total global production of photovoltaic panels. So they're a very, very small player. But what China certainly has done is scaled up their manufacturing base in order to compete internationally. The great news, though, is when you look at the United States, the lowest cost provider or the lowest cost manufacturer, and the largest manufacturer in the world, is a US company, and they manufacture in Ohio and Arizona, and that's First Solar. And when you look at the highest efficiency panel manufacturer in the world, that's also a US company. So we're innovating our way out, and I think the United States will be able to directly compete and beat China in the solar industry going forward.
Monica Trauzzi: Are there parts of Solyndra's technology that you think could be valuable to the solar industry as a whole?
Rhone Resch: I think thin film technologies in general offer a great opportunity for us to continue to innovate, increase the efficiency, lower the cost. First Solar is a thin film manufacturer, and they're the lowest cost provider in the world. With respect to Solyndra's particular technology, I think it proved that it is unable to compete in today's marketplace. And as prices continue to come down for solar, I think that type of technology that they were deploying unfortunately is a thing of the past.
Monica Trauzzi: Okay. We'll end it there. Thank you for coming on the show. Nice to see you.
Rhone Resch: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
[End of Audio]