Solyndra's bankruptcy is a lesson in the need for more than political points and investors out to turn a profit.

Solyndra, a venture-backed solar panel maker founded in 2005, was the poster child of the Obama administration's American Recovery and Reinvestment Act (ARRA). It was the first company to receive federal loan guarantees under the already existing Energy Policy Act of 2005. A hefty $535 million in government-backed loans was going to provide 73 percent of the funds to build Solyndra's second manufacturing plant in Fremont, California, with the rest of the financing coming from private equity. It was said that 3,000 workers would find employment in the plant's construction and 1,000 workers in its ongoing operation.

The factory was built, but, overburdened with capacity, Solyndra went bankrupt in August 2011. The company's 2010 sales of 65 megawatts of power were not even 60 percent of the capacity of its first factory, making the 500-megawatt capacity of the second factory totally redundant. As Yuliya Chernova has written in the Wall Street Journal, some investors with knowledge of Solyndra's operations see the government-backed loan as the source of the company's downfall.

There is little doubt that Obama's team could not resist the opportunity to score political points through a deal that promised to stimulate the economy while investing in our renewables future. As President Obama put it when he visited Solyndra in May 2010, "Before the Recovery Act, we could build just 5 percent of the world's solar panels. In the next few years, we're going to double our share to more than 10 percent. Here at this site, Solyndra expects to make enough solar panels each year to generate 500 megawatts of electricity."

But Solyndra was not the only U.S. solar company to go bankrupt last August. Seventeen-year-old Evergreen Solar Inc., a Massachusetts-based company that had received $58 million in state subsidies, closed its factory last March, and then in August entered Chapter 11 with almost $500 million in debt. Also in August -- in between the bankruptcies of Evergreen and Solyndra -- another solar manufacturer, SpectraWatt, called it quits. These three failures resulted in the loss of 2,000 U.S. jobs. As it was, Evergreen had already moved some of its manufacturing to China in an effort to remain competitive.

The global market for solar power was over $71 billion in 2010, double what it was in 2009. Yet there is no question that the future is bleak for solar manufacturing in the United States. According to the Poughkeepsie Journal, in late August SpectraWatt asked the bankruptcy court to permit it to auction off its plant and equipment quickly because "within six months, used solar cell manufacturing equipment and related assets could flood the market and lower its auction bids."

The manufacture of solar panels is a capital-intensive business that requires huge plant-level economies of scale for competitive success. The Chinese have become the leading producers of solar panels for both their home and global markets. Allegations of corruption aside, is it possible for a high-wage economy such as the United States to compete as a global manufacturer in the solar industry?

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In the case of Solyndra, besides its government-backed loans the company raised over $1 billion in venture capital from 11 major sources. Beyond government subsidies, it is these financiers upon whom we rely for the committed finance required to sustain the operations of a solar manufacturing plant until it can achieve sufficient scale to be profitable. If a venture like Solyndra had not promised eventual success, why would this "smart" business money have flowed so abundantly into it?

The answer is the stock market. The holders of private equity were betting that they could recoup their investments and make a handsome profit for themselves when Solyndra did its initial public offering (IPO) on NASDAQ, even if at that point Solyndra itself might be a long way from attaining profitability. In 2005, when Solyndra was founded, the IPO market was heating up after a sharp slump with the Internet bust at the beginning of the decade, and 2007 was the strongest year for IPOs since 2000. Then the financial meltdown of 2008 killed the IPO market. In December 2009, with the economy in recovery and with its $535 in government-guaranteed loans in hand, Solyndra registered its IPO.

At the time, however, the company had accumulated $558 million in losses since its founding, and in a filing to the Securities and Exchange Commission in April 2010 Solyndra's accountant, PriceWaterhouseCoopers, wrote that its financial condition raised "substantial doubt about its ability to a continue as a going concern." That nixed the possibility of an IPO. Now, with Solyndra in bankruptcy, the investors have lost their money and U.S. taxpayers are on the hook as the company's largest creditor.

For solar manufacturing in the United States to be profitable, it will need committed finance that the U.S. venture capital community -- still by far the world's richest -- is unwilling to provide. They have learned that solar companies require more capital and a longer incubation period than they are willing to endure. If we want advanced solar research to go forward in the United States, we need to engage in advanced manufacturing here as well. In renewable energy, as in other high-tech fields, government and business both need to be involved in providing the "patient" capital required to develop and utilize productive resources. At present, however, notwithstanding its massive wealth, the United States lacks the financial institutions that can cope with the 21st century world of high-technology and global competition.

Matt Hopkins is a research fellow at the UMass Center for Industrial Competitiveness, focusing on issues of clean technology and economic development. He has written a soon-to-be-released report on the U.S. wind turbine industry.

William Lazonick is director of the UMass Center for Industrial Competitiveness and president of The Academic-Industry Research Network. His book, Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States was awarded the 2010 Schumpeter Prize.

If the U.S. wants to tackle climate change and stay competitive in the global economy, it needs to stop playing by the old rules and start making new ones.

The looming global warming catastrophe could be worse, in the long term, than any war, social collapse, or single famine in human history. We need to scale up renewable technologies as quickly as possible -- by any means necessary. And that is exactly what the Chinese are doing. According to Steven Lacey at Climate Progress, while world solar cell manufacturing capacity was only 100 MW in 2000, it is now 50,000 MW –- and China by itself accounts for 57 percent. But this puts Americans, including Lacey and other environmentalists, in a peculiar position. On the one hand, we desperately want more solar and other renewable technologies. But on the other hand, by scaling up so fast, the Chinese might wipe out the American solar panel industry. Instead of trying to stop the Chinese from doing what they are doing, the U.S. needs to learn from them.

The environmental community has tended to contradict itself when it comes to rolling out renewable technologies. On the one hand, leaders such as Al Gore and my personal favorite global visionary, Lester Brown, call for a World War II-style mobilization to quickly convert our civilization so that we can avert ecological calamity. But the means advocated, such as putting a price on carbon, are not up to the task. We can't afford to wait to see if the market will do what is necessary.

The Chinese are not putting a price on carbon. In fact, they won't even negotiate a target for how much carbon they will output by 2020 or any other date. But they are doing something much more important: They are showing the world how you scale up a technology with a World War II type of effort. Some call it “cheating,” but if this is cheating, let's have much more. What are the Chinese doing right?

First, China has a five-year plan. In the U.S., corporations have five-year plans, and so does the Department of Defense. But imagine a president giving a State of the Union address announcing such a plan. There would be cries of “socialism!” I say, socialism, shmocialism, whatever works. The longer the time range, the better. Congress is now debating a multi-year transportation bill; the same should be done for the entire energy sector.

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Second, many Chinese “banks," if you want to call them that, make money virtually free, and often don't even get their “loans” back. The government gives companies land –- which, by the way, Lincoln and the Republicans gave to railroads when obstructionist Southern Democrats were out of the way during the Civil War. Where would the U.S. be today if the railroad industry hadn't received a huge boost at the dawn of the industrial era, or if the Internet hadn't received a similar boost 100 years later?

Third, the Chinese import foreign technology and require foreign companies that set up factories in China to train Chinese engineers. Ever since the British tried to prohibit their engineers from traveling at the beginning of the Industrial Revolution so that Britain could maintain its dominance, other countries have been trying obtain -- or, as the originating country calls it, steal -- new technology. In a way this, is all part of a 1,000-year cycle, as the West gained many important technologies like the compass, printing, and gunpowder from the Chinese, who are now borrowing technology back.

Fourth, the Chinese are producing hundreds of thousands of engineers for their expanding manufacturing economy. Forty percent of the engineers in the U.S. are involved with manufacturing, according to a New York Times piece by Louis Uchitelle. Uchitelle reports that the Chinese manufacturing sector has either just grown larger than the American one or will shortly do so. As manufacturing declines here, it becomes much less attractive to have a career as an engineer. In China, on the other hand, being an engineer is a clear way to make it into the good life.

The point is not to idolize China. Far from it -- China is in a race to see whether it can switch to clean technologies before its dirty ones overwhelm its ecosystem and cause its economy to collapse, and its currency is much too low. But nations have always learned from other nations. Sometimes, the “teachers” cry “unfair!” when the “students” don't play by the rules. One hundred years ago, the British complained that the Americans were always copying their inventions.

But innovation is not simply a matter of technology; it is also a matter of policy. If something works, use it, even if it offends conventional wisdom. In fact, particularly if it offends conventional wisdom. That's what happened during the New Deal era of the 1930s, when the old policies were clearly failing and new ones had to be put in place (for instance, instead of tinkering with market rules in order to develop the Tennessee Valley, the TVA rebuilt the whole area). With global warming and other environmental problems, such as the end of cheap oil, threatening civilization, we need policy innovations even more than we need technological ones.

Jon Rynn is the author of the book Manufacturing Green Prosperity: The power to rebuild the American middle class, available from Praeger Press. He holds a Ph.D. in political science and is a Visiting Scholar at the CUNY Institute for Urban Systems.

Between questionable science, health hazards, and exorbitant costs, there's no fracking way that drilling for natural gas will solve our long-term energy issues.

Natural gas is being touted as a fuel of the future, a way to bridge the gap between a dirty energy and clean energy economy. But according to numerous articles and a report from David Hughes at the Post-Carbon Institute, what we may have is another bridge to nowhere (page numbers in this post refer to Hughes' study). Fracking, the rapidly expanding technique for pulling natural gas out of the ground, may be worse for global warming than coal, ultimately very expensive, and not productive enough to make much of a difference in natural gas supply anyway.

Fracking, or hydraulic fracturing, is a 60-year old technique that has recently been applied to the huge deposits of what is called shale, a form of rock that can contain large amounts of natural gas or oil. Now natural gas companies are drilling thousands of these wells, fracturing the shale, and pumping millions of gallons of water laced with hundreds of chemicals to release the natural gas (pages 22-24).

While burning natural gas emits about half the greenhouse gases of coal, transporting, processing, and delivering that gas significantly reduces its advantages. And methane -- natural gas -- is a much stronger greenhouse gas than carbon dioxide for about 20 years. According to a recent study and other research, shale gas actually leads to more greenhouse gas emissions than conventional drilling.

The main problem seems to be that the drilling companies and trucking companies do a sloppy job and let gas escape into the atmosphere – and into drinking water.  This was best exemplified in the movie GasLand, which showed that people near drilling sites could light their tap water on fire.

An enormous controversy has erupted around this technique, with some making accusations of potentially catastrophic environmental impacts, while others call fracking a ”game changer." A new study shows that drinking water near fracking sites contains large amounts of natural gas, while proponents claim that none of the toxic chemicals that make up the fracking mixture have contaminated water supplies.  New York State has temporarily banned the procedure, although Governor Cuomo has indicated he will lift the ban for most of the state. New Jersey (and France) will probably ban it. The EPA is still studying the issue, but Dick Cheney and company made sure that fracking is not covered by the Safe Drinking Water Act, and states have less expertise, money and motivation to monitor the situation.

The Federal Energy Information Administration (EIA) gets more and more bullish about the prospects for shale gas, recently claiming that 45% of natural gas in this country will come from shale gas by 2034.  Currently, the number is only 25% (pages 28-30). But according to the New York Times, this opinion is contested from within the agency itself. There are signs that the EIA is following the lead of the natural gas industry, not doing independent research. Meanwhile, the current price for natural gas, about 4 dollars per thousand cubic feet (mcf), is below the level needed to make shale gas profitable for most drilling – costs estimates range from a bit over 4 dollars to an average of 7 dollars and even 11 dollars per mcf (page 31). And many fracking firms are now moving to drill for oil, not gas, because the price for gas is too low to justify the added expense.

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Some fracking advocates claim that we could switch our transportation system to be natural gas based. But to do that would require a doubling of our natural gas production (pages 52-54). Despite all the hype, even the EIA seems to think that natural gas production in this country will only increase from about 24 trillion cubic feet to about 26 trillion by 2034 (page 29). That isn't enough to even keep up with the anticipated demand, and basically shale gas production will make up for declining conventional gas production, assuming there is as much shale gas as advertised. As David Hughes explains, the EIA is grossly underestimating the amount of wells that would have to be drilled. Recently that number has climbed as high as 30,000 per year(page 19). If half of those use fracking techniques, and a good percentage of those use millions of gallons of water that become toxic – well, it certainly doesn't sound like a very sustainable solution.

Even if we wanted to make the switch, getting gas from there to here poses its own challenges.  The only way to do it is with liquified natural gas (LNG); that is, cooling it way down to liquid form, putting it on a big ship that keeps it cool, and warming it back up when it gets here. It has been estimated that LNG adds enough greenhouse gas emissions that the natural gas has about the same emissions as coal. It is also more expensive than domestic gas, and it also means the US would become dependent on nations like Qatar, Russia, and -- hmmm, Iran -- than we might want to be.

Another strike against natural gas: wind is getting very cost competitive. Wind could form the backbone of a national electrical system, with gas used for those times when there isn't enough wind blowing – although the more wind built in the more places, the less gas would be needed for this purpose. A new report suggests that solar panels on buildings could be used to substitute for gas used at peak usage times, say when air conditioners are going full blast, at pretty close to the same price.

There is one interesting technology that could make natural gas more sustainable: microturbines. These are systems that are installed in a large building -- say, an apartment building that has 60 or more apartments, according to the New York Times. These can use any source of natural gas, such as natural gas generated from a building's own waste, or from landfills. And because the turbine is in the building, the heat from the turbine can be used to heat air and water, in a process called co-generation. Up to about 80% of the energy from natural gas can be captured by these units, as opposed to the miserable 32% or so when centralized gas or coal plants generate electricity. Many European countries, such as Denmark, use district heating, a method of using the heat from energy production to warm neighborhoods. This is a reason that density in cities and towns can be more efficient than sprawl.

Even if natural gas emitted “only” half the greenhouse gases of coal, or if fracking turns out to be not as toxic as feared, and relatively profitable, natural gas would still not be a “game changer”: we need to take greenhouse gases out of the atmosphere, not put any more in; we shouldn't be endangering our water supplies. and we can find renewable sources of energy that, in the long run, make much more economic sense. Not only will natural gas not be the fuel of the future, we won't be using much fuel. Instead we will use renewable sources of energy from the sun, wind, and the earth.

Jon Rynn is the author of the book Manufacturing Green Prosperity: The power to rebuild the American middle class, available from Praeger Press. He holds a Ph.D. in political science and is a Visiting Scholar at the CUNY Institute for Urban Systems.

No one has the perfect vision for our energy future -- so all answers should be given serious thought.

Robert Bryce is very good at advancing sophisticated arguments that try to show that what many people believe is not so. In a recent op-ed in the New York Times, he gives a worthwhile critique of renewable energy -- after all, every technology should be analyzed for its strengths and weaknesses. The larger question, which his piece does well to illuminate, is this: in an imperfect world, what constitutes an economically and ecologically sustainable national energy system? How do we create one that is as low-cost as possible in the long run, one that is not based on a resource that will run out, and one that will emit as little carbon and pollution as possible? The problem is that his favored alternatives, natural gas and nuclear power, have serious flaws that need to be addressed. In the end, a mixture of solutions will be necessary for creating a sustainable energy future.

In pursuit of an answer to these questions, Bryce invokes the legacy of a founding philosopher of the environmental movement, E.F. Schumacher, author of a set of ideas that are encapsulated in the title of his classic book “Small is Beautiful." Schumacher virtually invented the concept of "appropriate technology," that is, technologies designed to fit in with the social capacities of a particular society and that are ecologically sustainable. These technologies should, above all else, not destroy the “natural capital,” i.e. the environmental resources, that underlies all societies and life. That is why Schumacher advocated for the use of renewable energy as an alternative to fossil fuels and other resources that destroy the environment and then destroy an economy when they run out.

Which is why it is so peculiar that Bryce, at the end of his op-ed, both praises Schumacher and implies that natural gas and nuclear power are superior to renewable energy. Recently a Guardian columnist unearthed Schumacher’s opinion of nuclear power:

There could be no clearer example of the prevailing dictatorship of economics… That nuclear fission represents an incredible, incomparable, and unique hazard for human life does not enter any calculation and is never mentioned… [To submit to the nuclear lobby] is a transgression against life itself, a transgression infinitely more serious than any crime ever perpetrated by man. The idea that a civilization could sustain itself on the basis of such a transgression is an ethical, spiritual, and metaphysical monstrosity.

After Fukushima, this quote seems particularly clairvoyant. Sustainability doesn’t simply mean minimizing emissions that cause global warming, it means minimizing long-term damage to the environment, of which global warming is but one possible cause. An irradiated planet would be just as deadly, if not more so, than global warming.

Natural gas does not fit Schumacher’s definition of appropriate technology either, since Schumacher believed that “the world cannot rely on diminishing supplies of non-renewables.” Natural gas is not renewable. Schumacher did not live to see the destructive toll that natural gas is wreaking on the water supplies of the United States as a result of "fracking." Fracking entails the fracturing of rock in order to free up vast underground sources of natural gas, which unfortunately requires poisoning huge amounts of water. Fresh water, despite its generally low price, is about the most precious resource on Earth. The regions that are being subjected to fracking risk being turned into wastelands, and risk becoming uninhabitable -- sort of like nuclear power.

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So nuclear and natural gas power don’t fit the bill for a sustainable energy system because they will run out of fuel, their cost will rise, they emit carbon (yes, even nuclear power), and they are very damaging to the environment.

Bryce also points out that wind and solar power are flawed. While they are not perfect resources, for some of these problems I would argue that he protests too much. For instance, he calculates in his article that 50 tons of steel is required per megawatt for wind, while for natural gas, only one quarter of a ton of steel is required. He starts off his article by pointing out that California just passed a law that 17,000 megawatts of electricity will have to be generated with renewable power. Even if all of that power came from wind, that would mean 850,000 tons of steel would be necessary to build the needed wind turbines. Yet the US alone, which produces only about 8% of the world’s steel, annually rolls out about 93 million tons. So to create the steel needed for producing one third of California’s electricity with wind turbines would require only one percent of one year of our steel output.

And almost all steel can be recycled -- more than 50% of the steel produced annually in the U.S. comes from scrap steel. Scrap steel is in high demand because the mini-mills that have become so popular in the last few decades process scrap -- that is, they recycle steel. Mini-mills use electricity to melt down the scrap, which could come from wind. Steel, therefore, could be part of an “appropriate,” indefinitely sustainable production system.

However, steel mills and electric networks with huge wind turbines do not bring the word “small” to mind, and Bryce correctly points out that wind farms require a lot of land. But the vast majority of that land, generally farm land, can continue to be used for it primary purpose.

Concentrated solar power (CSP), on the other hand, does use up the land it is situated on, including the desert, which is a thriving ecosystem. Because of this I am much more ambivalent about CSP, although Joe Romm thinks CSP is a critical part of a clean energy solution. Installing solar panels on buildings would better fulfill the “small is beautiful” requirement than big wind or solar farms. Buildings are “autonomous units,” to use Schumacher’s phrase, which means that economic power is distributed. That is, citizens have greater control over their economic environment when they control the means of energy production. The problem is, solar panels require multibillion dollar, big factories to create the purified silicon needed for their production. On the other hand, wind power networks can provide the electricity needed for those factories (which can indeed provide reliable and continuous electricity), and the source of silicon is sand, or quartz. So again, we have the potential for a sustainable energy system.

We are left, it seems to me, with alternatives that no one can consider pure. Schumacher might have hesitated to advocate for big renewable projects and factories; environmentalists might not want transmission lines crisscrossing ecosystems; Bryce would prefer natural gas be a central part of a sustainable energy system. But building big photovoltaic and wind factories, big wind and possibly solar farms, installing solar panels on buildings, and using some natural gas are certainly better parts of a solution than building more coal plants, which not only emit the largest concentrations of carbon, but spew a toxic cocktail of mercury and other public safety hazards. It is important to debate all alternatives, and then, soberly and pragmatically, choose the best economically and ecologically sustainable combination.

Jon Rynn is the author of the book Manufacturing Green Prosperity: The power to rebuild the American middle class, available from Praeger Press. He holds a Ph.D. in political science and is a Visiting Scholar at the CUNY Institute for Urban Systems.