A quick look at the comment stream on our Solyndra coverage will reveal an absolute rejection of the idea of the DOE picking winners and losers. There's also the conspiracy theorists that insist that Solyndra and other firms garnered their funding due to insider connections and because of political pull (see Kaiser, George, not Söze).
Shouldn't governments set a course for industrial policy? Shouldn't they use their budgets to influence this course?
Simply "letting the market decide" leaves us with lead paint, DDT pesticide, and the 80-hour work week. Markets have a tendency to ignore externalities like people's health and long-term societal well-being in the interest of quarterly profits. I remain a staunch supporter of quarterly profits.
Anyway, here's a chart:
f
Chart by Ryan Cunningham using Reuters and Bloomberg sources
Clearly, China is providing tens of billions of dollars in low-cost loans to Chinese solar companies. This chart is a bit misleading because the U.S. DOE loan program has spent more than $40 billion on a portfolio of greentech firms and approximately $10 billion on solar.
The difference is that, to some extent, the U.S. is betting on new, unproven technologies, while China is banking on the expansion of proven crystalline solar technologies.
So should the U.S. have forsaken the funding of Solyndra, SoloPower, and the pending loans to high-risk technologies in favor of channeling all of the cash to SunPower, MEMC, and First Solar to assure their dominance and growth?