Solyndra could carry another $14.3M taxpayer price tag
American taxpayers are already on the hook for $535 million as a result of the Department of Energy’s loan guarantee for the now-bankrupt solar company Solyndra. Now they could owe up to $14.3 million more.
The Labor Department announced yesterday it had approved Trade Adjustment Assistance for laid-off Solyndra employees, meaning the company’s roughly 1,100 former workers are eligible for federal aid packages valued by the Labor Department at about $13,000 a head.
The TAA program offers job retraining, allowances for job searching, health benefits and up to 130 weeks of income support help to American workers who have lost their jobs due to the trade practices of foreign countries.
The request was made by the Alameda County Workforce Investment Board on behalf of Solyndra employees on Sept. 2, just two days after Solyndra sought Chapter 11 bankruptcy protection.
The TAA program became the center of a brief congressional dogfight in September when Democrats insisted on its funding as part of a group of new free trade agreements.
Republicans initially resisted funding the program. Florida GOP Sen. Mark Rubio introduced an amendment to the TAA authorization to exclude workers who were laid off because of increased foreign exports. That amendment failed by a 34–62 vote.
While the Energy Department says Solyndra was undercut by Chinese competition, conservative critics say the company’s business model was not competitive in any market, and now taxpayers are left to foot the bill for the government’s poor vetting.
“TAA has wandered so far from its supposed purpose that it is now being used to clean up the government’s own mistakes,” said Derek Scissors, a research fellow at the Heritage Foundation,
Heritage’s Rob Bluey notes that Solyndra’s solar panels cost $6 to produce, yet were sold for $3 in a market where the competitive price was $2 at most.
Solyndra tried to retain a competitive edge with low installation costs, even securing a 30 percent tax credit from the IRS to customers who installed the company’s solar panels
The Energy Policy Act of 2005 had already boosted investment tax credits for solar panels from 10 percent to 30 percent. But a “private letter ruling” obtained by Solyndra from the IRS increased the tax credit for its products by an additional 30 percent.
The additional credit only applied to solar panels installed on so-called “cool” roofs, painted white to reflect sunlight. Solyndra was then the only vendor whose solar panels qualified.
But even with its considerable government support, Solyndra never gained a toe-hold in the solar market. It declared bankruptcy on Aug. 31.