Another Solyndra already? Some worry even worse is coming.
Beacon Power, like Solyndra a recipient of a federal loan guarantee under the DOE's renewable energy program, has declared bankruptcy, leaving taxpayers to pay the tab. But the firm is tiny. Bigger ones are out there.
Have American taxpayers just been saddled with another Solyndra?Skip to next paragraph
Subscribe Today to the Monitor
Beacon Power Corp., a tiny renewable energy company that was a recipient of a $43 million loan guarantee backed by the Department of Energy, declared bankruptcy on Sunday, leaving taxpayers to cover the $39.1 million in loans the company has not yet repaid.
The figure pales in comparison with the unpaid balance of nearly $535 million left by Solyndra, the California solar startup that declared bankruptcy in September, but it hinted at the potential downside of the DOE’s loan guarantee program, through which other companies have received far larger amounts, even billions of dollars.
Creator of a novel, high-tech carbon-composite flywheel to store energy and help regulate fluctuations on the electric grid, Massachusetts-based Beacon Power used the federal loan guarantee and built a 20-megawatt flywheel energy storage facility in Stephenson, N.Y. Such storage systems, including grid-scale battery storage, hold promise because they can respond more quickly than power plants can to power fluctuations in the grid, including from the addition of wind and solar power plants.
IN PICTURES: Solar power
But, as was the case with Solyndra, which developed the ability to manufacture solar power panels with a cheaper material than silicon only to see the worldwide price of silicon plummet, Beacon’s ingenuity was not enough to ensure its survival.
“The current economic and political climate, the financing terms mandated by DOE, and Beacon’s recent delisting notice from Nasdaq, have together severely restricted Beacon’s access to additional investments through the equity markets,” chief executive officer F. William Capp wrote in filings with the US Bankruptcy Court in Wilmington, Del., Businessweek.com reported.
In the case of Solyndra, allegations of political favoritism and other irregularities already being investigated by Congress and the FBI have become a political sledgehammer for the GOP to use against President Obama. Whether Beacon Power becomes grist for that political mill, others are concerned that the biggest threat may lie elsewhere.
Solyndra and Beacon Power, which both won federal backing for their loans under the DOE’s $34 billion loan guarantee program for renewable energy, could be just the tip of the bad-loan-bailout iceberg, fiscal watchdog groups warn.