Solyndra's multimillion-dollar white elephant
Alison Vekshin,Mark Chediak, Bloomberg News
Paul Sakuma / AP
The lavish Solyndra plant sits empty at its Fremont site along Interstate 880. The company spent millions in federal money to build the factory.
The glass-and-metal building that Solyndra LLC began erecting alongside Interstate 880 in Fremont in September 2009 was something the Silicon Valley area hadn't seen in years: a new factory.
It wasn't just any factory. When it was completed at an estimated cost of $733 million, including proceeds from a $528 million federal loan guarantee, it covered 300,000 square feet, the equivalent of five football fields. It had robots that whistled Disney tunes, spa-like showers with liquid-crystal displays of the water temperature, and glass-walled conference rooms.
"The new building is like the Taj Mahal," John Pierce, a San Jose resident who worked as a facilities manager at Solyndra, said.
The building, designed to make far more solar panels than Solyndra got orders for, is now shuttered, and taxpayers may be stuck with it. Solyndra filed for bankruptcy protection on Sept. 5, leaving in its wake investigations by Congress and the FBI and a Republican-fueled political embarrassment for the Obama administration, which issued the loan guarantee. About 1,100 workers lost their jobs.
Amid the still-unfolding postmortems, the factory stands as emblematic of money misspent and the "Field of Dreams" ethos that seemed to drive the venture, said Ramesh Misra, a solar-industry analyst in Los Angeles for Brigantine Advisors.
"When you don't have the demand, you can't go into something with the attitude, 'Build it and they will come,' " Misra said. "You have to make sure the customers are already there when you build it."
'Backlog' in question He is skeptical of the company's statement, in a press release on the groundbreaking for the plant, that it had a backlog of $2 billion in orders for its cylindrical solar modules for commercial rooftops, which it touted as cheaper to install and more efficient than competing flat panels. "Backlog" is a term sometimes used loosely in the industry and may not represent firm orders at all, he said.
David Miller, a Solyndra spokesman, did not respond to a phone call and e-mail seeking comment.
Solyndra was the dream of founder Chris Gronet, who received a doctorate in semiconductor processing at Stanford University and had spent 11 years as an executive at Applied Materials Inc. Gronet didn't return a phone call seeking comment.
Energy Secretary Steven Chu and then-Gov. Arnold Schwarzenegger attended the 2009 groundbreaking for the plant. At the event, Chu said the U.S. solar-energy industry was losing out to countries like China and that the loan guarantee, the first awarded by the department under President Obama's 2009 economic stimulus plan, would ensure the company's orders would be filled by U.S. workers.
Even as Chu, Gronet and Schwarzenegger were thrusting their shovels into the dirt, market forces were working against Solyndra. The price of polysilicon, the main ingredient in traditional solar panels, had plunged. By the time the plant opened in January, the price would be down about 40 percent from when Solyndra got the loan guarantee. Chinese companies were increasing production of their ever-cheaper competing flat panels.
Solyndra executives rushed construction in a race to fill orders, putting some work on a 24-hour, seven-day schedule. The factory was up and ready for equipment installation in 10 months. The project employed more than 3,000 union construction workers, according to a Solyndra background sheet.
"They were anticipating large production," Juancho Suntay, a former Solyndra equipment maintenance technician, said. "That's why they wanted to have a state-of-the-art factory."
The plant features 19 loading docks, four electric car charging stations in the parking lot and landscaping of wild grass and a rock garden. An automated rail system moved parts through the assembly process.
Robots that resembled "a big freezer with wheels" maneuvered around the factory transporting panels from one machine to another, said George Garma, a former Solyndra equipment maintenance technician from Fremont. The Disney tunes alerted workers to the robots' presence.
"It was first class," said David Chan, who was an information-technology contractor for Solyndra. "I've been in the business for 25 years and have seen some elaborate buildings. I've never seen a facility like it."
Commercial real estate agents in the region wondered why a new factory was being built in the region, the epicenter of some of the priciest real estate in the country, where most new construction consists of office space.
Empty spaces "There hasn't been a factory or warehouse building built in Silicon Valley in well over 10 years," Jeff Fredericks, managing partner at Colliers International in San Jose, said in an e-mail.
The asking rate for industrial properties in Silicon Valley is the fourth-most expensive in the country, according to Jack DePuy, Bay Area research manager at CB Richard Ellis in Foster City.
About 11.4 percent, or 950,801 square feet, of industrial space was vacant in Fremont in September 2009, according to data from Colliers.
"There was available space that we talked about with them," Bob Wasserman, Fremont's mayor, said in an interview. "It was their decision that they needed a new building. Was that a good decision? It didn't turn out to be."
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