Solyndra used misleading information to get US$500 million loan – US DOE report

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

A report, four years in the making, has been released by the US Department of Energy (DOE), Office of Inspector General into the collapse of CIGS thin-film producer, Solyndra, and the way more than US$500 million of loan guarantees were given out by the department to the failed company.

Criticism in the special report rests primarily with the executives of Solyndra and a catalogue of misleading information over its suposed US$2.2 billion in order backlog, which was touted to the media and was critical part in the loan being awarded, but which evidence has revealed was at least US$700 million less than claimed.

The report said Solyndra’s claims that its modules offered lower balance of systems costs because of their easier installation were also overplayed. The company had used this claim to justify the higher price of its modules and assertions to the department that it would therefore be able to generate revenue sufficient to continue operating and support repayments of the US$535 million loan. 

But the report referred to evidence suggesting that shortly before the loan closed, Solyndra knew internally that savings its modules offered compared to conventional ones were 25-65% less than had been originally represented to the department.

“This is important because lower savings potentially translated to lower revenue which, in turn, could have affected Solyndra’s ability to repay the loan,” the report noted.

The report cited an email sent by a Solyndra official to the department a few days before the loan closed, stating that BOS savings versus a typical module was “about US$1/Watt”. But that claimed advantage was twice what the official’s supervisor had acknowledged internally, the report said. When Solyndra requested a second loan in late 2009 the BOS cost savings were only US$0.70/W to US$0.75/W.

Solyndra’s biggest customers, which accounted for the bulk of the order backlog ahead of the loan, had already baulked at the high prices; several had forced Solyndra to offer as much as a 15% discount to the signed contracts and had already significantly reduced order quantities, making it impossible for the company to remain in business. 

The report stated: “Our investigation confirmed that during the loan guarantee application process and while drawing down loan proceeds, Solyndra provided the Department with statements, assertions, and certifications that were inaccurate and misleading, misrepresented known facts, and, in some instances, omitted information that was highly relevant to key decisions in the process to award and execute the $535 million loan guarantee. In our view, the investigative record suggests that the actions of certain Solyndra officials were, at best, reckless and irresponsible or, at worst, an orchestrated effort to knowingly and intentionally deceive and mislead the Department.”

The DOE itself was also criticised in its due- iligence ahead of the loan and was said to have failed to see on several occasions that documentation from Solyndra had changed that would have seriously put the potential loan at the time in question. 

The report did not highlight other damning documentation regarding the CIGS module performance as previously highlighted in an investigation on the matter by the US House Committee on Energy and Commerce and covered by PV Tech back in 2011. 

Solyndra’s CEO, Chris Gronet, had claimed to the House Committee that it was Chinese module imports and cheaper process that had forced the company into bankruptcy.

However, as a result of all the factors the report noted that the missed opportunities to see the errors in Solyndra’s claims had “placed more than $500 million in U.S. taxpayers’ funds in jeopardy”. 

The report in PDF format can be downloaded directly from here.

25 May 2022
Transforming the Canadian energy market. Solar & Storage Canada will focus on fostering and expanding the solar and energy storage market in Canada. Co-located with f-cell Canada.
14 June 2022
Join us in Napa to unlock the key to reliable PV module supply to the U.S. market in 2022 & 2023. We'll also be gathering the main players in the US solar market for some wine tasting!
19 July 2022
As New South Wales is gearing up to become a renewable energy superpower, an exciting clean energy event is coming to Sydney. Energy Next is a free-to-attend industry event focusing on the latest renewable energy and energy management technologies, which will be held from 19-20 July 2022 at the ICC Sydney in Darling Harbour. Organised by the same people behind the country’s largest clean energy event, All-Energy Australia, Energy Next will bring a quality exhibition and technical session series to NSW. Energy Next will also host the Clean Energy Council’s Solar Masterclass with a program developed for solar designers and installers. Across two days, Energy Next will provide an extensive exhibition, workshops and networking opportunities for those working in the renewable energy industry to meet with leading suppliers, discover the latest technologies and gain an understanding of how to successfully launch new clean energy projects.
23 August 2022
Intersolar South America, South America’s largest exhibition and conference for the solar industry, takes place at the Expo Center Norte in São Paulo, Brazil, on August 23–25, 2022, and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. At the accompanying Intersolar South America Conference, renowned experts shed light on hot topics in the solar industry. In 2021 – despite the Covid-19 pandemic – Intersolar South America welcomed more than 28,000 visitors and over 1,000 conference attendees over 3 days. 200+ providers showcased their products. Combining local and international expertise, Intersolar South America brings together the PV and solar thermal sector to discuss the current status and strategic trends for Latin American PV markets, as well as technology innovations and new business opportunities. Overall, distributed generation is still driving momentum in the Brazilian market.
6 September 2022
Intersolar Mexico sits at the cross-section of photovoltaics, solar heating & cooling technologies, and energy storage. The event serves as the industry’s go-to source for invaluable technology trends and premier B2B contacts in the promising Mexican solar market. From September 6–8, 2022 Intersolar Mexico together with the co-located The GREEN Expo® and Aquatech Mexico will take place in Centro Citibanamex, Mexico City.
19 September 2022
RE+ 2022 is the umbrella event that includes SPI, ESI, RE+ Power, and RE+ Infrastructure. As North America's largest renewable energy event, it's a catalyst for industry innovation that's supercharging business growth in the clean energy economy.

Read Next

May 18, 2022
Powering electrolysers with renewables generation that would otherwise be curtailed could be an effective strategy for producing green hydrogen in the coming years until the H2 sector benefits from further cost declines, it was suggested during a panel discussion.
May 18, 2022
The UN secretary-general, António Guterres, has issued a stark warning concerning the “dismal litany of humanity’s failure to tackle climate disruption” in an speech in which he set out “five critical actions to jumpstart the renewable energy transition”.
May 18, 2022
Shoals Technologies has become the latest solar manufacturer to adjust its guidance for the year, blaming an “increasingly challenging environment” caused by the US AD/CVD investigation.
May 18, 2022
LONGi Solar is planning to develop a 20GW module assembly facility in Wuhu City, Anhui Province after signing a cooperation agreement with local authorities.
May 17, 2022
German utility giant RWE has issued a green bond with a volume of €2 billion (US$2.1 billion), the proceeds of which will be used to pursue development of solar and wind projects.
May 17, 2022
A bipartisan group of US governors have pressured the President Joe Biden and Gina Raimondo to expedite the anti-dumping circumvention investigation (AD/CVD).

Subscribe to Newsletter

Upcoming Events

Solar Media Events
June 14, 2022
Napa, USA
Solar Media Events
October 4, 2022
New York, USA