The first thought that leaps to mind when I read this article is that Silicon Energy’s business model isn’t built on anything solid:
Silicon Energy, a Washington-based solar panel company, missed its first two loan payments.
So, the Iron Range Resources and Rehabilitation Board (IRRB) restructured the deal and the new payments do not start until October 2013.
Silicon Energy opened its solar panel manufacturing plant in 2011 just outside Virginia, Minn. on the Iron Range.
The company received a $1.5 million loan from the IRRB and the IRRB also gave the Mountain Iron Economic Development Authority $3.6 million to loan Silicon Energy to help build its new plant.
Silicon Energy also owes an initial payment of $75,000 on the $3.6 million loan in October as well.
The head of the IRRB says the company’s business model had to be redone after the tsunami in Japan hurt the company’s timeline for opening up and selling its solar panels.
IRRB Commissioner, Tony Sertich, also says the company did not get into a rebate program offered by Xcel Energy, but should be able to get into that program soon, which should help Silicon Energy sell more solar panels to homeowners and businesses.
First, the Iron Range Resources and Rehabilitation Board is the IRRRB, not the IRRB. Second, the plethora of excuses for Silicon Energy’s failure to make its payments are rationalizations. They aren’t legitimate excuses. Blaming Silicon Energy’s failuter to make their payments on the Japanese tsunami sounds wimpy (Think President Obama blaming the economy’s poor performance on ATMs). Third, a company that needs subsidies, aka rebates, to make a profit isn’t a legitimate business model.
Most importantly, the reality is that the IRRRB’s existence is tied to their dispensing massive amounts of pork to hide the DFL’s unwillingness to let the Iron Range develop a real economy based on mining rather than scraps of pork from the IRRRB.
That isn’t the way to build a real economy. The way to build a healthy, prospering economy is by letting companies create things of value. Do thoughtful people think that a company that fails without massive government subsidies adds anything of value to the Iron Range economy? If it isn’t adding anything to the Iron Range economy, it isn’t adding anything to Minnesota’s economy.
The DFL keeps insisting that solar and wind power are the future. Where’s their proof of that? The only thing on the record thus far are their allegations that wind and solar are the future. That’s anything but proof that they’re the future.