Cleantech comes under greater scrutiny
It’s been two years since Solyndra LLC filed for bankruptcy, but the fallout from the case has only just begun. Back in 2011, the company received $500 million in stimulus funding from the U.S. government’s $20 billion stimulus package to help stay afloat amidst the economic recession. Despite the failure and criticism from Republican lawmakers, the Obama industry pledged support to renewable energy companies like Solyndra in order to boost job growth and popularize the project amongst the public.
In the past, governments have been quick to embrace Cleantech – not only for the reduced impact on the environment, but also for the innovation of new industries through cutting edge technology. Cleantech companies also bring new life to older industries, by introducing them to more efficient and sustainable practices, which in turn helps make them more competitive in the marketplace.
Still, the Solyndra case proved that innovation alone cannot guarantee success. Unable to compete with foreign competitors (whose factories produced an oversupply of panels at low prices and offered buyers lengthy payment terms) the company was forced to shut down and fire 1,100 employees.
As a result, the Solyndra case has since become somewhat of a scapegoat and served as a lesson learned for future Cleantech companies applying for stimulus funds. Whether it is recycling, renewable energy, or green transportation, these groups will be under greater government scrutiny in terms of their internal operations, compliance procedures and other regulations. Today, Washington has made Cleantech a political battle ground.
However, this is not necessarily a bad thing. The result of more stringent terms will force Cleantech companies to focus on the basics of running their business as they digest what is certain to be a wave of new operation requirements.
Project documentation, policy and procedures will be much more formal. Metrics and milestones will be put into place in tandem with backend internal audit procedures guaranteeing compliance and deterring fraud. Finally, private investors will welcome these changes as it will reduce their risk and help increase available funds to Cleantech companies.
Determining clear-cut guidelines for funding and development will help prevent bankruptcies and other business failures like the Solyndra case. Doing so will also help Cleantech industry leaders establish greater credibility amongst politicians and government agencies. The hope is that in the end, Cleantech will thrive and lead the wave of innovation, new technology, and bring about a new global industrial revolution.
About the Author
David Bardelli is a Senior Vice President in the Property & Casualty Group and the Casualty Practice Leader for WGA. David has extensive knowledge with casualty risks, including technology healthcare, business services and miscellaneous manufacturing groups of all sizes.