SunEdison Bankruptcy Three Times Bigger than Solyndra
Does this sound familiar? A shiny new solar company comes onto the scene, satisfying the cries of the solar panel-obsessed clean energy fanatics. Somewhere along the way, Barack Obama and Congress indiscriminately award the solar company millions in taxpayer funds. A few years pass, and a slow but largely ignored descent into financial ruin ends in scandal.
You may be thinking of the famed Solyndra debacle. Unfortunately for taxpayers, SunEdison, the self-proclaimed “largest green energy company,” filed for bankruptcy protection in late April. Even after becoming the 13th-most subsidized company in the United States, SunEdison misused taxpayer funds and lied, resulting in a recent Chapter 11 bankruptcy filing.
SunEdison failed to deliver on its promises, neglecting to complete a series of energy projects it had previously agreed to undertake. As SunEdison’s business plan unraveled, and even despite the trepidation with which clean energy companies come under close scrutiny, the U.S. Justice Department has recently begun investigating the company’s accounting practices. Lucky for them, however, SunEdison found a willing cohort in the solar game long ago – the Obama Administration. Nevertheless, even with the federal government supporting them with taxpayer funds, SunEdison could not manage even short-term success. In other words, the company utterly wasted all your money, and to no avail.
The latest solar scandal should come as no surprise because the entire industry is driven primarily by perverse incentives. Companies like SunEdison are handed money from federal and state governments, supporting the delusion that the rampant growth they are experiencing is real and sustainable. The fact of the matter is that the solar industry’s growth is not real, but rather a bubble ready to burst at any moment. SunEdison operated under the assumption that it could do no wrong. Possible failure was never a consideration. A rampant and ill-advised acquisition spree followed, ending in bankruptcy and millions of taxpayer funds misused.
Unfortunately, SunEdison’s nonsense is fairly commonplace in the solar industry. For example, Abengoa, a foreign solar company, has received more than $2 billion in taxpayer support. Abengoa’s financial dealings have been a complete disaster – such a disaster that a Spanish bankruptcy judge recently gave the flailing solar company seven months to right its disastrous finances.
Abound Solar experienced a similar fate. The company declared bankruptcy in 2012 after knowingly selling faulty and underperforming solar panels for years, a fact that company executives knew upon receiving taxpayer funds. Nevertheless, Abound Solar unabashedly mislead consumers in order to receive the Department of Energy’s $400 million loan guarantee.
The solar industry’s propensity for lying, cheating, and wasting taxpayer funds is truly astounding. When solar companies fail, taxpayers foot the bill. The solar industry has been coddled by federal and state governments for several decades, and the current subsidy-heavy, accountability-lacking model is entirely unsustainable. How many more bankruptcies and billions in squandered taxpayer funds will it take before the solar industry is forced to survive on its own?