House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), who has criticized the administration for its failed loan guarantee to the firm Solyndra, urged the Energy Department to approve funding assistance for a Michigan solar company that said last week it is halting operations.
Upton and 13 other Michigan lawmakers sent a letter to Energy Secretary Steven Chu in December 2009 recommending Auburn Hills-based United Solar Ovonics for a loan under President Obama’s economic stimulus bill.
The loan was never approved by the Energy Department, but Upton’s advocacy for United Solar stands in contrast to his recent skepticism about the government’s clean-energy loan guarantee program.
“It is not the role of government to pick winners and losers,” Upton said in a statement in September regarding Solyndra. “Let’s learn the lessons of Solyndra before another dollar goes out the door.”
In 2009, Upton had also signed letters asking the Energy Department to provide financial assistance to automakers, a wind turbine maker, a biofuels refinery, a smart-grid project, a battery company and a water wave energy firm.
The Energy Department’s “job is to scrutinize applications and identify the best participants, and that’s what the Michigan delegation asked them to do,” said Alexa Marrero, a spokesman for Upton. “Many in Congress questioned whether the stimulus would produce the promised jobs. At the same time, members on both sides of the aisle wanted to see jobs created and folks put back to work, especially in Michigan.”
Congressional Republicans and the administration have sparred for weeks over Solyndra, with many lawmakers charging that the government has been wasting millions of taxpayer dollars funding businesses that never stood a chance. Chu testifies before the House committee on Thursday in what is expected to be a contentious hearing.
United Solar’s parent company, Energy Conversion Devices, is struggling to stay afloat as it faces financial pressures similar to those that brought down Solyndra. ECD, which makes lightweight solar laminates for rooftops, reported a loss of $57.5 million in the last quarter on sharply lower revenues. On Nov. 8, it announced that it was suspending all manufacturing, laying off 500 workers and putting 400 others on furlough. The company has a total of 1,300 employees.
ECD once looked so promising that President George W. Bush visited the company’s headquarters in 2006 as he pitched new energy initiatives for the country.
By late 2009, however, the company was struggling. That December, ECD announced a restructuring plan to turn around the company, including laying off 400 employees.
Two weeks later, Upton and the other lawmakers sent their letter to Chu highlighting United Solar and three other clean-energy companies.
“We are writing to bring to your attention several loan guarantee applications submitted to the Department of Energy for funding,” wrote the lawmakers. Michigan “has developed an aggressive strategy to diversify our economy through investments in growth sectors.”
ECD did not respond to requests for comment. The White House declined to provide a comment for this story.
The other Michigan lawmakers who signed the letter included several Democrats, such as Sens. Debbie Stabenow and Carl Levin and Reps. John D. Dingell and Sander M. Levin. Republican Dave Camp, chairman of the House Ways and Means Committee, also put his name on the letter.
The fate of United Solar mirrors Solyndra’s in many ways. It had its own proprietary technology, but to hold on to sales it was selling units at a loss. Its biggest market has been Italy, which pays solar companies a subsidized premium for electricity. Italy, now pressed to cut its budget in the face of financial pressures, accounted for just less than half of United Solar’s sales in the fiscal year that ended June 30.
In July, ECD said it was trying to sell its Ovonic Battery Co. subsidiary to raise money it could plow into its solar business.
But prospects remain difficult. It has become tough for U.S. solar companies to survive in the face of cheap natural gas and competition from other countries, especially China, that heavily subsidize the technology.
ECD’s stock closed Wednesday at 34 cents a share, up from its low Monday. As recently as Jan. 8, 2010, it stood at $12.55 a share.