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This Week in Clean Economy: Dueling Solyndra Ads Foreshadow Energy-Centric Campaign

No signs of "Solyndra fatigue" on the campaign front, while Obama's jobs council weighs in on a critical wind subsidy.

Jan 20, 2012
President Barack Obama

How much political capital can Republican candidates and their aligned groups continue to squeeze out of Solyndra, the giant green stain on President Obama's first term?

It seems they're looking to find out, with a new ad campaign that aims to keep the failed clean energy investment in the forefront of voters' minds.

In response, Obama has tried to reframe the issue in the first T.V. spot of his re-election campaign, by redirecting the spotlight away from Solyndra on to what the president says are his job-creating clean energy policies.

The result of these dueling ad campaigns is a unique start to the 2012 campaign season, in which the clean energy economy has received top billing.

Chris Fox, co-director of policy programs at Ceres, a non-partisan coalition of investors and green groups, said the ads show deepening divisions between Republicans and Democrats on the question of whether clean energy can drive America's economic recovery.

"It's gotten to be such a partisan issue now, and we expect [the debate] to continue throughout the 2012 election season," he told InsideClimate News.

The battle of the ads began on Monday, when Americans for Prosperity, a conservative group, launched a $6 million campaign to run one-minute spots on T.V. and social media sites attacking Obama for backing Solyndra, the California solar panel maker that received half a billion dollars in federal loan guarantees before going belly-up in August.

The ad charges that Obama knew Solyndra was on the brink of collapse but pressed ahead with federal support to placate his political allies. "It's not about people; it's politics. Solyndra's workers felt betrayed," the ad says.

AFP will run the ads in key swing states—Iowa, Michigan, North Carolina, Ohio, Virginia and Wisconsin—ahead of the president's Jan. 24 State of the Union address. The group spent $2.4 million in November on a similar ad blitz that accused Obama of helping to secure the Solyndra loan to help his campaign donors.

Back in 2010, Obama touted Solyndra as a highly prized example of what clean energy dollars can do to revitalize the U.S. economy. The firm was the first of 28 projects to receive a combined $16 billion in stimulus-backed loan guarantees for manufacturing and renewable energy generation.

The loan program has awarded more than $35 billion to nearly 40 clean energy and advanced vehicle manufacturing projects, which the department says has helped to spawn some 62,000 jobs nationwide.

But Solyndra couldn't overcome its long-running financial woes, even after winning the subsidy, and eventually laid off 1,100 workers at its plant in Fremont, Calif.

AFP plays off that failure in its ad this week. "Today, ninety percent of Solyndra's laid off workers remain unemployed ... and Obama said this is a model of jobs and growth?"

The president's rebuttal ad, which ran on Wednesday night and will air in the same six swing states targeted by AFP, boasts that America's clean energy industry now employs 2.7 million Americans and is "expanding rapidly," citing figures from a 2011 report by the Brookings Institution.

Can the job figures help shake off Obama's Solyndra stigma? Fox of Ceres believes, at least theoretically, they should. The clean economy "has shown growth throughout the recession, so it should be a bright spot that both parties should be supporting," he said.

In the meantime, House Republicans are still plowing ahead with a months-old probe of how the White House handled the solar firm's loan guarantee.

Last week, the White House handed an additional 66 pages of internal correspondence relating to Solyndra to the House Energy and Commerce Committee, on top of the 85,000 pages of documents that investigators have already reviewed. The new documents don't seem to support the GOP hunch that the White House influenced the DOE decision on the loan, the New York Times reported.

The committee said that it's seeking more documents from SAIC, the parent company of a consulting firm hired by DOE to evaluate Solyndra, and the Government Services Administration, an independent agency that operates federal buildings.

The investigation could gain more steam from the White House's independent review of the loan program, which is set to wrap up at the end of January, The Hill reported.

Not helping matters for the Obama administration is that Solyndra can't shake its image as a failure. It still can't pay back the more than $500 million it owes the government. And on Tuesday, the company failed to attract any bids from buyers, who could have brought production and jobs back to the California facility. Auctioneers will soon start selling off the remaining production equipment and real estate, according to Reuters.

As Concerns Mount Over Wind Subsidy, Obama's Jobs Council Weighs In

Solyndra continues to cast a shadow over renewable energy federal tax breaks. In recent weeks, concern has been rising over the Dec. 31 lapse of the production tax credit (PTC) for renewable electricity, which is seen as a critical engine for wind power growth and new jobs.

The PTC, which was first enacted in 1992, pays wind farm owners 2.2 cents for every kilowatt-hour of electricity they produce during the first decade of operation. In short, its goal is to help wind compete with coal.

The tax credit has expired three times since it was introduced in 1999. And each time, the number of new wind installations plummeted by at least 70 percent compared with the previous year, resulting in major job losses, according to industry estimates.

U.S. wind advocates have lobbied hard over the past few months to extend the PTC, to no avail.

This week, at least, they found a new and powerful ally in President Obama's Council on Jobs and Competitiveness, a nonpartisan group of nearly 30 business, labor and academic leaders created in 2009 to give Obama advice on how to grow the economy.

On Tuesday, the council presented Obama with its 2011 year-end Roadmap to Renewal report. In it, the leaders emphasized the need to extend production tax credits for energy projects, which they say will "promote the type of innovation and investment America needs to diversify its generation portfolio and prepare for rising levels of energy demand." 

Whether the council's endorsement will hold sway in Congress is uncertain.

The PTC could potentially get wrapped up in a bill to extend a payroll tax cut for workers by another year, Politico reported. The Democratic-led Senate and Republican-led House reached a narrow compromise  at the end of the year to extend the tax cut by two months after a down-to-the-wire battle before the end of the first session of the 112th Congress.

But in a fresh round of negotiations on the payroll tax cut set to start next week, Democrats and Republicans will likely spar over what else the bill should include, and the PTC may not survive. Democrats are planning to push to extend a host of tax incentives for businesses, an effort that Republicans aligned with the spending-averse Tea Party movement are likely to resist, Reuters reported.

Meanwhile, one of the world's wind power giants has been ratcheting up warnings.

Vestas, the Danish wind turbine maker with a U.S. headquarters in Oregon, said on Jan. 12 that it might have to lay off 1,600 American employees if the PTC for wind power is left to expire on Dec. 31.

That's on top of the 2,335 positions that Vestas is already cutting worldwide  as it battles tough competition from Chinese manufacturers and a global glut of turbines that's caused prices to drop dramatically. The first round of layoffs—which included 182 U.S. jobs—will help the company slash manufacturing and operating costs by nearly $200 million.

Vestas has spent more than $1 billion to build four wind turbine factories in Colorado, and it employs more than 3,000 people in America. The company doesn't have any plans right now to shut down its U.S. factories.

However, company officials wouldn't say how current and possible future job cuts would impact its brand-new, $16 million research facility in Marlborough, Mass. "We don't know if or how the global restructuring and cost reduction plan will affect the R&D facility in Marlborough," Andrew Longeteig, communications specialist for Vestas American Wind Technology, told GateHouse News Service.

The turbine manufacturer has been the sector's No. 1 advocate of extending the PTC, an incentive that indirectly benefits Vestas by supporting its customers, the country's wind farm operators.

But the company is hardly alone in firing off a warning shot.

"The production tax credit is incredibly vital to the U.S. market," Jacob Pedersen, an analyst at Sydbank A/S in Denmark, told Bloomberg. "If it isn't there, no one will invest. If you don't get the tax credit, the return on investment is lower."

In the meantime, the industry trade group says it's bracing for more bad news. A December report commissioned by the American Wind Energy Association (AWEA) found that 37,000 American jobs—or one-third of all wind manufacturing positions in the country—could be cut soon without the tax credit.

The "Vestas announcement shows the danger to U.S. manufacturing jobs if Congress waits any longer to extend" the tax credit, Dennis Bode, AWEA's chief executive, said in a statement.

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