Last summer, I wrote about how the Department of Energy rolled the dice with your money on a solar panel company called Solyndra, giving them a $535 million stimulus loan guarantee in September 2009. That was a few months before an audit of the firm found that it "has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders' deficit that, among other factors, raise substantial doubt about its ability to continue as a going concern." In fact, the federal loan guarantee provided the company with just a bit less than the $558 million it had already lost.
Solyndra has since cancelled the grand expansion plans that President Obama heralded in a speech he gave there last May. Instead of expanding into its newly built factory and hiring 1,000 more workers, it is abandoning its old factory, putting off its expansion plans indefinitely, and laying off dozens of worker and more than 100 contractors. Solyndra's problem is that Chinese solar manufacturers are eating its lunch, producing units more cost-effectively.
On January 7 , The New York Times reports, President Obama signed a military authorization bill containing a "buy American" provision, whose effect is to prevent the Pentagon from purchasing less expensive solar panels from China. The reason for the Pentagon's solar purchases is unique to its military purpose, the Times reports:
The American military is a rapidly growing consumer of renewable energy products, because it is extremely expensive and frequently dangerous to ship large quantities of fuel into remote areas of Iraq and Afghanistan.
As long as a government agency is forced by these circumstances to pay for a luxury like solar power, you'd expect us to try to get the best price. But that's not the way it works. The Times coverage focuses on the diplomatic ramifications of of the "buy American" provision, but on the domestic side, the taxpayer is being robbed twice here. First, he is being forced to prop up losers like Solyndra by bearing their risk through the stimulus package. Second, he is being forced to pay extra for solar panels through the government procurement process in order to prevent failure among companies that the government is heavily subsidizing.
There is a lesson here about the futility of Obama's push to re-shape the economy with the $814 billion stimulus gave him. The entire "green jobs" effort has thrown money at the creation of jobs that are probably not sustainable without massive taxpayer subsidies.