House Republicans have decided to bring the oh so imaginatively named “No More Solyndras Act” to the floor in response to the failure of Solyndra and other recipients of loan guarantees from the Department of Energy. To be sure, these failures have raised big questions about whether or not the United States Government should be in the venture risk business, but this legislation is not the answer.
Over the last few years, rapidly changing market conditions resulted in overwhelming competitive pressure on American entrepreneurs and industry that led to the collapse of a number of U.S. solar firms. Sadly, the U.S. has been losing ground in vital technologies for years, and as China, Brazil and India continue to invest in new technologies and “venture” into R&D, the U.S. will fall further and further behind.
As Silicon Valley’s representative in Congress, I believe that big questions deserve bold answers. President Obama has channeled the imagination and industry of Silicon Valley and boldly proclaimed that America must lead in the solar energy field. He rightly believes that federal support is crucial to making this happen.
There is an urgent need for investment in new technologies in America. There is an urgent need for venture risk in America, and the federal government must be involved through programs like the Department of Energy’s loan guarantees.
Solar technology in the U.S. faces a big, uphill challenge from foreign competitors who have easy access to capital and inexpensive labor. The cost of building manufacturing plants for solar cells is in the billions of dollars. That kind of investment cannot be delivered with venture capitalist or even bank money. Uncle Sam has to be involved, and because solar is still a developing technology, it will continue to be a high-risk venture.
Big questions deserve bold answers. To the question of whether a man could reach the moon, America answered with the Apollo program. To the question of whether a revolution in global technology and communication was possible, America answered with the Internet. These high-risk projects were transformed into world changing innovations because of federal investment.
50 years ago, the Apollo Program invested heavily in a new, risky technology called integrated circuits. Metal-Oxide-Semiconductor (MOS) technology allowed the American space industry to compete with and ultimately surpass the Soviets. The U.S. semiconductor industry was built on the Apollo investment. Years later, Uncle Sam helped Sematech develop large scale integrated devices to compete with Japan. This allowed the U.S. to become the world leader in information technology.
Consider the case of American manufacturing. Over the last decade, we have seen iPads, lithium batteries, LEDs, solar panels and flat screens invented and designed in America, but ultimately built overseas. There are many things we can try to do to change this trend. For example, I have introduced H.R. 3495, the Market Based Manufacturing Incentives Act and H.R. 6120, the Scaling Up Manufacturing Act, bills that would help companies manufacture products and build their first manufacturing facilities in the United States. I am also working to build government support for re-tooling the semiconductor manufacturing equipment industry to deal with the looming transition to larger 450 mm diameter wafers.
The Department of Energy Loan Guarantee Program was designed to take advantage of the federal government’s unique ability to help underwrite risky ventures. By partnering with the private sector, we can make the technological leaps necessary to keep America exceptional in the 21st Century. Unfortunately, some of the ventures supported by these loan guarantees won’t pan out. As we have learned in Silicon Valley, science and technology is a risky business, but it is an essential investment for job creation and economic growth — today, tomorrow and for decades to come.
But instead of trying to address the need to support American efforts to lead in innovative renewable energy technologies, House Republicans are seeking to shut promising and less costly new clean energy projects from the Department of Energy’s Loan Guarantee program.
Interestingly, in this bill House Republicans aren’t trying to end the loan guarantee program, which would seem to be the logical course if they believe it to be fatally flawed. Instead, they are limiting the remaining loan authority to projects for which applications have already been submitted, which are mostly high risk, capital intensive fossil fuel and nuclear projects. This approach will leave taxpayers at risk of even higher losses if the projects fail, and have taxpayers supporting technologies that do not deliver the return on investment of clean, renewable energy.
When Steve Jobs passed away last year, people around the world praised his life and work. Steve not only had the vision to succeed, he had the guts to fail. The creator of world-changing technology like the iPad once designed a computer so flawed that he was forced to advise owners to pick it up and drop it whenever it froze. But Jobs didn’t give up; instead, he drew inspiration from his missteps. He kept trying, kept innovating and he ultimately won countless more risk missions than he lost. What worked for Jobs has worked for America before, and it must work for America again. We cannot abandon investment in technologies. We must oppose the “No More Solyndras Act.”