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USA: How Bright Is Solar Power’s Future in a Post-Solyndra America?

After the Obama administration-embraced solar-panel company Solyndra collapsed and defaulted on its government-backed loans, the surging U.S. solar industry is suddenly worried that the subsidies it receives — tax credits and loans guarantees — could dry up in the face of opposition from conservatives. Spencer Michels reports.

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GWEN IFILL: Next, the future for solar energy in the U.S., now clouded by the collapse of a California company backed by government loans.

NewsHour correspondent Spencer Michels reports.

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SPENCER MICHELS: The solar industry boasts that it’s growing fast, installing roof top panels that turn sunlight into electricity at a record pace. This year, it expects to create enough electricity to power 350,000 homes, double last year’s rate. And that, say proponents, saves a lot of fossil fuel.

LYNDON RIVE, SolarCity: The average cost of electricity would be just under 10 cents.

SPENCER MICHELS: Lyndon Rive is the founder and CEO of the privately held company SolarCity in an industry that gets various forms of government subsidies, including tax credits and loan guarantees, that make it cheaper for companies to borrow money to expand.

LYNDON RIVE: The solar industry has grown 60 percent year on year. Last year, it grew 50 percent. This year, it’s grown 60 percent. There’s over 5,000 companies that are in the solar industry.

SPENCER MICHELS: His firm, SolarCity, operating in 11 states, is the largest solar installer in the U.S. with 1,300 employees, 500 of them hired in the last 12 months. Nationally, solar employs 100,000 workers.

Yet industry groups and leaders have seen trouble signs ahead for a while.

Dan Reicher, director of Stanford’s Center for Energy Policy, says the industry is at risk.

DAN REICHER, Stanford’s Center for Energy Policy: We may not see the loan guarantee program extended. We may see a major cut in federal support for clean energy research and development. There’s going to be a major battle next year over extending some key tax credits for clean energy.

SPENCER MICHELS: Despite its growth, solar still supplies less than 1 percent of American electricity. The troubled economy has hurt investment in solar, and competition from China has undercut U.S. sales.

Several solar companies have failed, including OptiSolar in 2009, victims of what insiders call consolidation of the industry.

LYNDON RIVE: Those companies that cannot keep up with the innovation and the reduction of costs, they will go out of business. But it’s for the health of the entire industry.

SPENCER MICHELS: And then this year came the collapse of Solyndra, a California company making cylindrical solar panels, a firm President Obama visited and touted in May of 2010.

The company found it couldn’t compete with cheaper Chinese-made flat panels, so it defaulted on a government loan of half-a-billion dollars

The incident has contributed to a growing national debate on the value of green energy.

SolarCity’s Rive is concerned that Solyndra’s failure will make an embarrassed administration and a skittish Congress hold back on what he calls incentives or subsidies to help this fledgling industry, the kinds of government support the oil industry has always enjoyed.
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