Solyndra's Bankruptcy Strategy: Blame China

The Citizen's Guide to the Future
Oct. 16 2012 10:46 AM

Zombie Solyndra Is Suing Its Former Chinese Rivals For $1.5 Billion

Romney Solyndra
Mitt Romney has used Solyndra's failure to attack green energy subsidies, but doesn't mention the role of China in U.S. solar firms' struggles.

Photo by Justin Sullivan/Getty Images

Solyndra, the failed solar-power company that has been the butt of a thousand conservative attacks on Obama's green-energy policy, has long hewed to a "blame China" strategy, but until recently no one really took it seriously. After all, the company's unique cylindrical thin-film solar panels turned out to be expensive even compared to other U.S. solar panel makers' products, let alone those of Chinese manufacturers.

Will Oremus Will Oremus

Will Oremus is Slate's senior technology writer.

Last week, though, the U.S. Commerce Department finalized anti-dumping penalties against Chinese solar firms, ruling that they had sold their wares for less than they cost to make. Solyndra, which is in the midst of bankruptcy proceedings, wasted no time trying to capitalize on the ruling: It filed a lawsuit in federal court seeking $1.5 billion in damages from three major Chinese firms, alleging a conspiracy to corner the market.

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China's Suntech, the world's largest solar equipment manufacturer, was quick to wave aside the lawsuit. “It is obvious that this lawsuit is a misguided effort by Solyndra to find scapegoats for its failure to commercialize its technology at a competitive price point,” E. L. “Mick” McDaniel, managing director of Suntech's U.S. subsidiary, said in an email to Bloomberg News. He called the allegations "baseless."

Well, yes and no. Clearly Solyndra is looking for scapegoats. It's bankrupt, its creditors want their money back, and on top of that, it's perhaps the most ridiculed company in America today. So yes, it would be more than happy to deflect some blame and monetary burden for its failure to field a competitive product. Even if, as Christopher Mims explains in Quartz, it really failed for more mundane reasons.

That said, it's hard to argue the allegations are baseless when the U.S. Commerce Department has already ruled multiple times that these Chinese firms did in fact conspire to drive out competition. Solyndra's innovative strategy was based on the premise that prices for traditional solar panels would remain high. Instead, they plummeted, thanks in large part to companies like Suntech flooding the market.

And as for the claim that Solyndra's lawsuit is "misguided," I'd argue the opposite. Things can't get much worse for Solyndra, which has had insult after insult heaped on top of injury in the year since it filed for bankruptcy, to the point where many Americans are convinced the company somehow failed as a result of malfeasance or fraud as opposed to changing market conditions. Suing Chinese competitors forces people to pay at least a little attention to the real reason Solyndra went under, which is that traditional solar panels got really affordable all of a sudden. That, in turn, highlights the absurdity of green-energy skeptics using Solyndra's bankruptcy to argue against the viability of solar power in general.

Even if the lawsuit turns out to be a big loss for Solyndra, it might be a little victory for truth.

Future Tense is a partnership of SlateNew America, and Arizona State University.