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THE OBAMA ADMINISTRATION’S GREEN ENERGY 

GAMBLE: WHAT HAVE ALL THE TAXPAYER 

SUBSIDIES ACHIEVED? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON REGULATORY AFFAIRS, 

STIMULUS OVERSIGHT AND GOVERNMENT 

SPENDING 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

MAY 16, 2012 

Serial No. 112–146 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

DAN BURTON, Indiana 

JOHN L. MICA, Florida 

TODD RUSSELL PLATTS, Pennsylvania 

MICHAEL R. TURNER, Ohio 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

CONNIE MACK, Florida 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

ANN MARIE BUERKLE, New York 

PAUL A. GOSAR, Arizona 

RAU ́ L R. LABRADOR, Idaho 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

JOE WALSH, Illinois 

TREY GOWDY, South Carolina 

DENNIS A. ROSS, Florida 

FRANK C. GUINTA, New Hampshire 

BLAKE FARENTHOLD, Texas 

MIKE KELLY, Pennsylvania 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

EDOLPHUS TOWNS, New York 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

DENNIS J. KUCINICH, Ohio 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

MIKE QUIGLEY, Illinois 

DANNY K. DAVIS, Illinois 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

CHRISTOPHER S. MURPHY, Connecticut 

JACKIE SPEIER, California 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

ROBERT BORDEN, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

SUBCOMMITTEE ON REGULATORY AFFAIRS, STIMULUS OVERSIGHT AND GOVERNMENT

SPENDING

JIM JORDAN, Ohio, Chairman 

ANN MARIE BUERKLE, New York, Vice 

Chairwoman 

CONNIE MACK, Florida 

RAU ́ L R. LABRADOR, Idaho 

SCOTT DESJARLAIS, Tennessee 

FRANK C. GUINTA, New Hampshire 

MIKE KELLY, Pennsylvania 

DENNIS J. KUCINICH, Ohio, Ranking 

Minority Member 

JIM COOPER, Tennessee 

JACKIE SPEIER, California 

BRUCE L. BRALEY, Iowa 

(III) 

C O N T E N T S 

Page 

Hearing held on May 16, 2012 ............................................................................... 1 

WITNESSES 

Mr. Jim Nelson, President and CEO, Solar3D, Inc. 

Oral Statement .......................................................................................... 4 

Written Statement .................................................................................... 7 

Mr. Greg Kats, President, Capital-E 

Oral Statement .......................................................................................... 15 

Written Statement .................................................................................... 17 

Mr. Craig Witsoe, CEO, Abound Solar, Inc. 

Oral Statement .......................................................................................... 30 

Written Statement .................................................................................... 32 

Mr. Brian D. Fairbank, President and CEO, Director, Nevada Geothermal 

Power, Inc. 

Oral Statement .......................................................................................... 38 

Written Statement .................................................................................... 40 

Mr. Michael J. Ahearn, Chairman of the Board of Directors, First Solar, 

Inc. 

Oral Statement .......................................................................................... 46 

Written Statement .................................................................................... 48 

Mr. John M. Woolard, President an CEO, Brightsource Energy, Inc. 

Oral Statement .......................................................................................... 51 

Written Statement .................................................................................... 53 

APPENDIX 

Chairman Issa’s Opening Statement, for the Record as agreed to by unanimous consent ........................................................................................................ 98 

Elijah E. Cummings, Ranking Member, A Member of Congress from the 

State of Maryland, Opening Statement ............................................................. 100 

(1) 

THE OBAMA ADMINISTRATION’S GREEN ENERGY GAMBLE: WHAT HAVE ALL THE TAXPAYER SUBSIDIES ACHIEVED? 

WEDNESDAY, MAY 16, 2012, 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON REGULATORY AFFAIRS, STIMULUS

OVERSIGHT, AND GOVERNMENT SPENDING, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The subcommittee met, pursuant to call, at 9:31 a.m., in Room 

2154, Rayburn House Office Building, Hon. Jim Jordan [chairman 

of the subcommittee] presiding. 

Present: Representatives Jordan, Buerkle, DesJarlais, Guinta, 

Kelly, Kucinich, Issa, Gowdy Cummings, and Norton. 

Also Present: Representative Mulvaney. 

Staff Present: Alexia Adrolina, Majority Assistant Clerk; Michael 

R. Bebeau, Majority Assistant Clerk; Will L. Boyington, Majority 

Staff Assistant; Molly Boyl, Majority Parliamentarian; Lawrence J. 

Brady, Majority Staff Director; Drew Colliatie, Majority Legislative 

Assistant; John Cuaderes, Majority Deputy Staff Director; Adam P. 

Fromm, Majority Director of Member Services and Committee Operations; Linda Good, Majority Chief Clerk; Tyler Grimm, Majority 

Professional Staff Member; Peter Haller, Majority Senior Counsel; 

Christopher Hixon, Majority Deputy Chief Counsel, Oversight; 

Mark D. Marin, Majority Director of Oversight; Kristina M. Moore, 

Majority Senior Counsel; Laura L. Rush, Majority Deputy Chief 

Clerk; Jeff Solsby, Majority Senior Communications Advisor; Rebecca Watkins, Majority Press Secretary; Michael Whatley, Majority Professional Staff Member; Jaron Bourke, Minority Director of 

Administration; Lisa Cody, Minority Investigator; Ashley Etienne, 

Minority Director of Communications; Chris Knauer, Minority Senior Investigator; Adam Koshkin, Minority Staff Assistant; Dave 

Rapallo, Minority Staff Director; and Donald Sherman, Minority 

Counsel. 

Mr. JORDAN. Let me thank all our witnesses for being here. You 

know how this works; you have to listen to us give a bunch of 

speeches before we get to your important testimony. So bear with 

us and we will get to you as quickly as we can. 

Before we do opening statements, I would ask unanimous consent that our colleague from South Carolina, Mr. Mulvaney, be allowed to participate in today’s hearing. Without objection, so ordered. 

2 

We will start with opening statements. We anticipate the Chairman from the full Committee and the Ranking Member of the full 

Committee, I think, joining us, so we will probably have four opening statements. President Obama’s 2009 stimulus directed nearly $90 billion of 

taxpayer funds toward green initiatives. The President told the 

American people that ‘‘green jobs would be a major force not just 

for environmental conservation, but for economic recovery as well.’’ 

The President said that we will harness the sun and the winds and 

the soil to fuel our cars and run our factories, and he promised that 

our Country would create millions of green jobs which would help 

us compete in the global economy. 

However, three years into this gamble, available evidence demonstrates these efforts have wasted vast sums of taxpayer money 

and have failed to achieve the stated goals. Today’s hearing is a 

continuation of the work done at the full Committee and this Subcommittee seeking to ensure that the American people know how 

their money is being spent. 

Four of the companies testifying before this Subcommittee today, 

Abound, First Solar, Nevada Geothermal, and BrightSource, cumulatively received $5 billion in loan guarantees from the Department 

of Energy, one-third of the entire loan guarantee portfolio. I want 

to thank each of these companies for testifying today. I know many 

of you had to travel great distance, and we appreciate you being 

here. 

Alternative energy certainly has a place in our economy, and we 

hope that all these companies succeed. But the best way to get 

cheap energy to American consumers is to let the market forces 

work, not to allow bureaucrats in Washington to select who wins 

and who loses. 

I also want to thank our other witnesses for appearing today, especially Mr. Nelson, the CEO of Solar3D. Jim has shown that billions of taxpayer dollars are not necessary to advance green technology. 

When taxpayers lost over half a billion dollars on Solyndra, the 

Obama Administration said that it was just one bad apple and the 

rest of the portfolio was strong. It is becoming increasingly clear 

that Solyndra was just the tip of the iceberg in a sea of taxpayer 

risk. 

Too often this Administration takes liberties with the American 

people’s money based on the flawed assumption that Government 

knows best. Today is about understanding what happens when the 

Federal Government tries to play venture capitalist. 

With that, I would yield to the gentleman from Ohio, my good 

friend from Cleveland, Mr. Kucinich. 

Mr. KUCINICH. Thank you very much. Good morning, Mr. Chairman, members of the Committee, and to our guests who are testifying in a moment. I am grateful for today’s hearing because I 

think it will serve to dispel some misconceptions about the Department of Energy’s Loan Guarantee Program and President Obama’s 

energy agenda. 

Recognizing that energy independence is critical to America’s future, Congress created the Loan Guarantee Program in 2009 to 

support innovative energy projects that involve more risk than is 

3 

typical for project and corporate debt financing. While my friends 

in the Majority would have you believe that the well publicized 

bankruptcies of Beacon Power and Solyndra threatened to tank the 

Department of Energy’s entire loan guarantee portfolio, in reality, 

the Department of Energy’s 1705 Loan Guarantee Portfolio Program is doing better than Congress expected when it established 

the program. 

When Congress created the 1705 Program, we appropriated about $2.47 billion in credit subsidy costs as an insurance fund to 

cover potential losses stemming from defaults by companies and 

projects receiving loan guarantees. That means that Congress prepared for losses to reach about 15 percent of total loan guarantees 

provided by the Program. In reality, actual losses are about 3 percent. That means that the Department of Energy’s rigorous and 

thorough due diligence process for choosing among applicants resulted in safer choices than Congress had anticipated. 

My friends on the other side of the aisle have singled out for 

scrutiny Federal support for renewable energy technologies. I note 

that they have not raised questions about the last 100 years of subsidies to promote the development of fossil fuel technologies, and 

I have not heard of any committee investigation into subsidies for 

the nuclear energy industry either, even though, in February 2010 

a single nuclear project received $8.33 billion in subsidies. 

Now, investing in energy independence is critical to America’s 

national security, its economic growth, and future job creation. If 

we fail to support these emerging renewable energy technologies, 

our Country will fall behind countries like Germany and China. If 

anything, we do not do enough for renewable energy, especially 

when compared to support for oil and gas. 

I have a chart that I would like put up, if we can do that. There 

we go. 

[Slide.] 

Mr. KUCINICH. This chart attached to my statement, Mr. Chairman, shows how much greater is the ongoing support for the oil 

and gas industry compared with renewable energy technology. 

So what I am wondering is why my friends have devoted four 

hearings, including today’s, to criticize renewable energy companies 

who have received Federal support, as Congress intended, in a well 

managed program and has returned better results than Congress 

even anticipated. 

So I think we should be helping to preserve America’s leadership 

and a technology that will only become more important, not less, 

in the future. Impugning the reputation of these companies before 

the television cameras will not be productive. 

With that, I want to thank my friend for calling this hearing and 

I yield back the balance of my time. Thank you. 

Mr. JORDAN. Anyone wish to make an opening statement on the 

Majority side? 

[No response.] 

Mr. JORDAN. Our Chairman is not yet with us, so we will proceed. Members who may have seven days to submit opening statements and extraneous material for the record. 

We now want to welcome our panel of witnesses. We first want 

to introduce Mr. James Nelson, who is the President and CEO of 

4 

Solar3D, Incorporated. We also have with us Mr. Gregory Kats, 

who is the President of Capital-E; Mr .Craig Witsoe is the President and CEO of Abound Solar; and Mr. Brian Fairbank is President and CEO of Nevada Geothermal Power; and Mr. Michael 

Ahearn is the Chairman of the Board at First Solar; and, finally, 

Mr. Woolard is the President and CEO of BrightSource Energy 

Company. 

The Committee rules require that we have witnesses sworn in, 

so if you would just stand and raise your right hands, we will get 

this done here. 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth? If so, answer in the affirmative. 

[Witnesses respond in the affirmative.] 

Mr. JORDAN. Let the record show that all witnesses answered in 

the affirmative. 

Again, thank you all for being here. You guys, I think, understand the rules. You have five minutes. We will be a little lenient, 

but as close to five as you can do it, because we do want to get to 

questions, and the goal is to try to get out of here by noon if we 

can today, because I know that I have something I have to be to 

at 12. So we are going to go right down the line. 

Mr. KUCINICH. If you have to leave, I will—— 

[Laughter.] 

Mr. JORDAN. I would trust the good gentleman from Ohio, even 

though I disagreed with some of his statements in his opening 

statement. 

We are going to go right down the line. We are going to start 

with Mr. Nelson. You get your five minutes. Then we will just go 

right through and then we will get to questions. So, Mr. Nelson, 

you are recognized for your five minutes. 

STATEMENTS OF WITNESSES 

STATEMENT OF JIM NELSON 

Mr. NELSON. Thank you. The Government’s green energy policy 

includes two parts: support for basic research with the aim of developing new green energy technologies, and two is making loan 

guarantees to promote the adoption of green energy technologies. 

Supporting research is an important role of government, but the 

loan guarantee program is a wasteful mistake because it doesn’t 

work. 

Having spent most of my career developing strategy for companies large and small, I have learned one important thing, and that 

is that it is economics, not government policy, that drives behavior. 

And it is economics, not government policy, that will drive enthusiastic adoption of green energy. 

My company, Solar3D is a technology development company in 

Santa Barbara, California. We are developing an advanced technology, a new three-dimensional solar cell that will reduce the cost 

of solar energy by about 50 percent. Our objective is similar to that 

of the ill-fated Solyndra: to develop a new solar technology that can 

change the economics of the industry. However, our manner of execution is very different. 

5 

We have been supported by private investment in our company 

since the establishment in August 2010. We are not dependent or 

depending on government funding. We certainly do not expect such 

support will be necessary to facilitate commercialization of our new 

technology. 

Our go-to-market strategy will be to partner with a company that 

has the know-how to manufacture products similar to ours. While 

the 3D solar cell is a unique concept, our engineering approach has 

been to design a product with existing equipment, methods, and facilities in mind. We lease our facilities and we are able to pay the 

University of California for the use of higher level clean rooms and 

labs for our initial work in designing our new technology. These 

measures keep our capital costs low. We keep our staff lean and 

hiring key personnel for full-time work and then we use consultants to keep our operating costs low. By contrast, Solyndra’s unique technology attracted a $535 million loan guarantee, but there were many problems that happened 

as a result of their execution strategy. One is that they had to use 

all new machines. A second one is that they built a brand new 

300,000 square foot facility, complete with whistling robots. Three 

is that, even when the award was granted, it was clear that their 

operation was failing. And, finally, it was reported that bonuses 

were paid to the executives, despite the poor performance. 

The Department of Energy’s loan guarantee to Solyndra was an 

embarrassing example of the current system. The investment was 

undoubtedly scrutinized and rejected by nearby Silicon Valley venture capitalists, organizations abundantly more qualified to identify 

good investments than government committees. There was no urgent strategic need for the U.S. to have Solyndra rush its product 

to market. The decision to fund Solyndra’s attempt to commercialize does not stand up to reason. 

However, politics ultimately trumped reason. The bureaucrats 

awarding the financial aid were beholden to their political supervisors who had promised Americans that they were going to fix the 

U.S. economy by creating millions of green jobs, something that 

could not possibly happen in any time frame worthy of consideration. The price of Solyndra’s failure was borne by the American 

people. 

At Solar3D’s current level of development, our company has a 

much better chance than Solyndra ever did of creating a gamechanging technology. We have reached this point on the principles 

of free enterprise of risk or return, without the use of government 

aid. In the end, we will become commercial for less than $10 million, with the hope of creating a technology that will change the 

landscape of solar energy. It will be an example of the amazing 

American economic system at work. 

Government has a legitimate role in supporting basic research. 

ARPA-e, the program that awards small tranches of money for 

basic research and development in alternative energy, will receive 

$250 million in funding this year, which is only half of what we 

lost on the Solyndra project alone. This program can and should be 

expanded. Its objective is to fund innovative technologies that will 

improve the economics of alternative energy, which is ultimately 

the only path to widespread adoption of clean energy. 

6 

The loan guarantee program should be retired permanently. The 

path to commercialization requires brains, discipline, and grit. It is 

rarely aided, and often impeded, by government involvement. Our 

Government should trust the free market forces that have made 

American great. 

Ultimately, our Country’s investment in renewable power must 

help us become more globally competitive. Job creation and other 

ancillary goals are byproducts of renewable energy growth and are 

worthy objectives, but simply come as a result of successful businesses. The most important reason to invest is to get control of and 

reduce the cost of power generation in our Country. 

The desire for more jobs and employment is a political and social 

desire, not a business desire. A simple review of the DOE website 

reveals that about $16.6 billion has been put out in guarantees in 

the 1705 Program and has created 2400 jobs. That is $6.3 million 

per permanent job. It is not an economic program. 

Businesses are not made successful by more jobs. People get jobs 

by being competitive in the free enterprise system, by preparing 

themselves to be employed and to be better than the existing candidates. Renewable energy should be the same, by being great and 

productive in renewable energy. We need to produce the best products for the lowest price in the world, and that means that we need 

to get better operationally through the discipline and grit of the 

free enterprise system. 

[Prepared statement of Mr. Nelson follows:] 

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Mr. JORDAN. Thank you, Mr. Nelson. Appreciate that. 

Mr. Kats, you are recognized. 

STATEMENT OF GREG KATS 

Mr. KATS. Thank you very much for the opportunity to speak on 

these important issues today. The hearing addresses several questions. One, is the DOE Loan Guarantee Program successful financially? Specifically, does the program meet or fail to meet its financial objectives? Two, is the DOE loan program successful in nonfinancial objectives? Specifically, does it meet or fail to meet additional objectives, including strengthening job creation, security, and 

competitiveness? 

The DOE loan program has three parts, two of which were established in the George W. Bush Administration and one of which was 

established in the Obama Administration. Section 1705 of the DOE 

loan program was established through the 2009 American Reinvestment and Recovery Act as part of a far larger program to accelerate U.S. investment and employment in response to the 2008– 

2009 deep economic downturn. 

Federal loan guarantees like 1705 are established to enable financing of projects that would otherwise probably not receive financial funding and, like other bank and government commercial 

lending programs, assumes a default rate as normal and expected. 

In establishing the 1705 Loan Guarantee Program, for example, 

the Office of Management and Budget predicted, and Congress 

budgeted $2.47 billion to cover expected defaults or partial defaults. 

Defaults in Solyndra and Beacon after some funds are recouped from both parties are likely to net out to about $300 to $400 million. This is roughly 2 percent of the amount guaranteed. If there 

are no more losses, then the program would have to be viewed as 

a resounding success. 

While it is easy in hindsight to criticize the DOE loan program, 

the only fair basis for judging success or failure is whether the program achieved its financial objectives. Review of the loan portfolio 

outstanding suggests total defaults are ultimately likely to be in 

the range of $400 to $800 million, or about one-quarter of the 

amount projected and budgeted. Based on a reasonable assessment 

of outstanding portfolio financial profile and risks, the DOE loan 

program can therefore rationally only be viewed as a big success. 

There are other objectives, including security. 

The Army and Navy both have net zero programs aimed at reducing energy use on military bases, with the Navy targeting 50 

percent of its bases to have zero net energy consumption by 2020 

from a combination of renewable energy and energy efficiency. Energy is, in the words of Admiral Mullen, about not just defense, but 

security; not just survival, but prosperity. Our national defense infrastructure and systems hold the potential, in Admiral Mullen’s 

words, to help stem the tide of strategic, security issues related to 

climate change while improving operational effectiveness. 

The wind and solar innovation and industries were largely developed here in the United States, but our major competitors, including China and Germany, have, through sustained Federal domestic 

subsidies and purchases, rapidly expanded the size and strength of 

16 

their domestic wind and PV corporations. Today, of the top 10 global wind and PV manufacturers, only one of each is located in the 

United States. We should be deeply concerned about the security 

implications of the U.S. losing its global competitive leadership in 

these critical industries. 

Broad public support for expanded Federal investment in renewable energy reflects this understanding. China and Germany are 

out-investing us. Given the strategic and security importance of 

clean energy industries, weakening Federal support for the U.S. 

wind and PV and other clean industries undermines U.S. competitiveness and security. For security and financial reasons, the DOE 

should use the 85 percent of its 1705 funds that are still unused 

and still available in the Treasury to fulfill its purpose of funding 

and supporting additional U.S. clean energy technologies and companies. 

Defaults in the 1705 program to date have been far below projected. We expect, over time, to be a total of only one-quarter of 

what is budgeted. The clear financial success, the employment and 

security benefits demonstrated by this program, demonstrates that 

the DOE should ramp up its loan guarantee efforts and provide 

loan guarantee support for roughly another $30 to $40 billion of 

U.S. clean energy projects and companies. The DOE 1705 Loan 

Guarantee Program provides an important lift to U.S. clean energy 

investment growth, both strengthening job creation and supporting 

the strength of U.S. clean energy industries. But our main trading 

competitors, including China and Germany, are out-investing us. 

Given the strategic, security and employment importance of U.S. 

clean energy industries, weakening Federal support for the U.S. 

wind and solar industries undermines U.S. competitiveness and security. If the U.S. military is forced to import the technology it 

needs to achieve its mission, a shift into clean energy, it will weaken U.S. security. 

For financial security, employment, and competitiveness reasons, 

the DOE should use the 85 percent of its fund unused and still 

available to backstop U.S. energy companies and projects. And 

given the clear success of its loan program to date, based on rational measures of financial performance and on other measures, including security, employment, and competitiveness, the largest risk 

is that DOE slows its loan guarantee program. 

Failing to make substantial additional loan guarantees to expand 

U.S. strength in renewable and clean energy, strengthen U.S. job 

competitiveness, and security, would be an irrational and costly 

failure. The losers would be U.S. industry, U.S. military, U.S. taxpayer, and the U.S. workers. The only beneficiaries would be China 

and our other international competitors. 

Thank you. 

[Prepared statement of Mr. Kats follows:] 

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Mr. JORDAN. Thank you, Mr. Kats. 

Mr. Witsoe. 

STATEMENT OF CRAIG WITSOE 

Mr. WITSOE. Mr. Chairman, members of the Subcommittee, my 

name is Craig Witsoe. Since November of last year I have been the 

CEO of Abound Solar, an emerging U.S. technology company that 

manufactures solar panels in Colorado. We have an R&D facility 

in Colorado, as well as a factory, and we also have a planned site 

in Indiana that would be our second U.S. factory. 

Abound is very much an American story. Our company stemmed 

from advanced photovoltaic research started in the late 1980s at 

Colorado State University. Early funding came from the National 

Science Foundation, as well as the National Renewable Energy 

Lab. 

In 2007, Abound was formed as a startup company to commercialize this very innovative research. Abound produces a thin-film 

Cadmium Telluride, or CadTel, solar panel, using proprietary advanced manufacturing processes known as closed space sublimation. This technology, invented by Abound, allows fabrication of all 

critical photovoltaic semiconductor layers into one continuous piece 

of equipment. 

At scale, CadTel can be produced at lower cost per watt than the 

crystalline-silicon modules produced by many Chinese companies 

today. Abound is one of only three companies in the world to have 

significant CadTel experience. First Solar also uses CadTel and, actually, seven months ago General Electric announced that it would 

also use CadTel as its technology of choice for a new solar module 

factory in Colorado. And, of course, all three of these companies are 

American firms. 

Crystalline-silicon are much older technology used by Chinese 

companies is what they are using to dominate our markets. Actually, crystalline-silicon was invented in America by Bell Labs in 

1954. Now, fortunately, many believe that America can still win in 

the long run with new technologies like CadTel. In fact, within recent weeks, Abound, along with First Solar and GE, has been solicited to collaborate with the U.S. PV manufacturing consortium, 

SEMATECH and NREL, to help accelerate U.S. advancement of 

this critical technology for the future. This is not unlike 

SEMATECH’s initiative started in 1987, which helped recapture 

the U.S. lead in semiconductor manufacturing. 

Abound has attracted more than $300 million in private investment. In 2009, Abound also applied for additional funding to expand and upgrade our capacity through the 1705 DOE loan program. The DOE review lasted nearly two years, involved several 

technical and financial third-party consultants, and the loan was finalized in December 2010. 

To date, Abound has drawn down about $70 million out of the 

potential $400 million loan. Funds were used to complete and start 

up two production lines in Colorado. With these funds, our company made significant progress, nearly doubling the efficiency of 

our panels from 45 watts per panel up to now 85 watts per panel 

today. Abound has not drawn down any additional funds under the 

31 

program since August of 2011 and does not plan to draw down any 

more funds. 

Abound’s technology and business made very solid progress until 

about the second half of last year, when module prices fell 50 percent as a result of unprecedented discounting by Chinese solar 

panel companies. Abound believes that, at scale, our CadTel modules can compete with any other global company. But with a reported $34 billion in subsidies behind Chinese module makers, it 

is very hard when the competition is a country and not just a company. 

Extreme price actions by Chinese companies believed to be selling these solar panels below their cost has hurt many American 

solar manufacturing companies, including Abound. Instead of 

matching Chinese price levels, which would have caused us to sell 

our panels at a loss, Abound, in February of this year, made a very 

difficult decision, and that was to shut down our current generation 

module production in order to accelerate development of a next gen 

85 watt module. 

Now, while this very difficult action resulted in the temporary 

elimination of 180 full-time and 100 temporary jobs, we do believe 

that this very competitive next generation module can create even 

more jobs for America in the future. 

Abound’s technology progress has been made possible by $300 

million of private investment and $70 million drawn down from the 

DOE loan. Today China dominates the global solar module market 

using low-cost labor, enormous government backing, and U.S.-invented crystalline-silicon technology. But while this American invention has turned into Chinese industry, we believe that the U.S. 

can still win in the future by developing and scaling newer technologies like CadTel. At scale, our solar panels can be built by 

American workers with good paying jobs, at lower cost per watt 

than competing crystalline Chinese panels made with low-cost 

labor in China. 

Today technology startup companies come with significant risks. 

We know that. The recent aggressive price actions from Chinese 

companies do threaten to prevent innovative companies like 

Abound from achieving needed scale to win. Even with long-term 

superior technology, this dynamic has made the solar market very 

difficult for Abound and other module suppliers. 

The technology advances we have made can be critical elements 

to the U.S. regaining a competitive position in the global market. 

As we work to launch our next generation of solar module with the 

use of private financing, we are determined to continue to advance 

this U.S. technology to help turn American inventions into American industry. 

Thank you. 

[Prepared statement of Mr. Witsoe follows:] 

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Mr. JORDAN. Thank you, Mr. Witsoe. 

Mr. Fairbank. 

STATEMENT OF BRIAN D FAIRBANK 

Mr. FAIRBANK. Good morning, Mr. Chairman and members of the 

Subcommittee. It is my pleasure to appear today as a representative of Nevada Geothermal Power and the Blue Mountain Facility, 

and to speak with you about the many good things occurring at 

Blue Mountain both in terms of what is occurring at the power 

plant and also in the Winnemucca, Nevada region and beyond. 

These positive things are a result of the hard work of Nevada Geothermal Power and the Blue Mountain employees, the support of 

civic leaders and ordinary Nevadans, the dedication of trusted lenders, and, of course, the assistance of the Department of Energy Section 1705 Loan Guarantee Program. 

By way of introduction, I am the President and CEO of Nevada 

Geothermal Power, Inc., which is the ultimate corporate owner of 

the Blue Mountain Faulkner 1 geothermal power facility. I am a 

geological engineer by training, with over 30 years of geothermal 

engineering exploration and assessment experience. I am the past 

President of the Canadian Geothermal Energy Association and currently serve on the board of the Geothermal Resources Council 

based in California. 

My geothermal experience has taken me around the world and 

has included, by way of example, participation in the discovery of 

Canada’s Meager Creek geothermal area in the late 1970s; geothermal resource exploration and evaluations throughout North 

America and Central and South America; participation in the development of a national power plan for Kenya and consultation on 

their geothermal plants; and extensive geothermal experience 

throughout the Basin and Range geologic province of Nevada. 

Before delving into the specifics of the Blue Mountain facility, I 

think it worthwhile to briefly describe the nature of geothermal 

power and why we are so optimistic about its future as a clean, reliable source of energy in the United States. 

Geothermal power is a unique source of renewable natural energy that is a product of heat generated by and stored in the earth. 

The earth’s core is continually producing enormous amounts of 

heat, primarily by means of decay of radioactive materials, and secondarily by energy left over from the earth’s formation. 

Heat generated in the earth’s core is conducted upward in the 

crust. Under certain geological conditions, such as the emplacement 

of shallow magma chambers around young volcanoes or thinning of 

the crust in rift belts, such as occurs in Nevada, rock and water 

and the earth’s shallow crust is sometimes heated to a very high 

temperature. Surface manifestations of the underlying geothermal 

energy range from shallow hot groundwater, hot springs, or 

fumaroles. 

We are all familiar with some of the famous examples of geothermal energy in action, such as volcanoes, Mount St. Helens 

comes to mind; the Old Faithful geyser in Yellowstone National 

Park; and other hot springs areas. 

Advances in technology now allow us to harness the heat stored 

in the rock and water, and convert it to electrical power that can 

39 

be used to power our cities and industries without any of the pollution or negative side effects caused by other sources of energy. This 

is not a simple task, but one that we are committed to. 

Geothermal power plants are base load, operating nonstop 365 

days a year at around 95 percent availability. Other sources of natural energy, such as wind power, solar power, and hydroelectric 

power, all operate at lower capacities. And because geothermal 

plants require no fuel to operate, they are unaffected by fluctuations in prices, produce minimal harmful emissions, and have a 

very small surface footprint. Geothermal energy is, thus, a natural, 

clean, renewable, and efficient source of power, the potential of 

which we have only just begun to tap. 

NGP’s team consists of outstanding dedicated individuals who 

are true experts in their respective fields. Our technical leaders 

have over a century of combined experience in energy and in the 

geothermal energy communities, and are universally respected for 

their expertise and commitment. 

Relating to this morning’s project focus and the DOE loan guarantee, NGP Blue Mountain ILLC is the registered owner of four 

Federal geothermal leases covering eight sections of land and additional private geothermal leases covering nine sections of land, for 

a total of 17 square miles. Our leases include both the geothermal 

production rights and surface rights necessary for the power plant 

and well field activities. The leases are situated with no competing 

geothermal leases in the area and no known environmental or 

other impediments to current or future drilling and plant operations. 

The Blue Mountain geothermal resource represents the first new 

discovery of a geothermal site in the Western United States in 20 

years. Today Blue Mountain is one of the largest binary cycle geothermal plants in Nevada. The Blue Mountain project was helped 

by the DOE Loan Guarantee Program, which backs a loan by John 

Hancock. The facility’s operating capacity is sufficient to service the 

Hancock loan through its remaining term. No taxpayer dollars 

have gone toward servicing the Hancock loan. 

But our strategic plans for Blue Mountain are more ambitious 

than merely producing power to meet our loan commitments. We 

continue to work actively with independent engineers to understand and utilize the geothermal resource at Blue Mountain. We 

remain bullish on the future geothermal resource potential and are 

working on a plan to construct new northern injection wells and 

one new production well to achieve a targeted 52 megawatts on a 

gross basis, or 41 megawatts net to the grid. 

These growth plans are possible only because of the solid foundation that has been put in place by the hard work of Nevada Geothermal Power employees and the financial support of our lenders 

and, of course, the loan guarantee put in place by DOE. 

Thank you for the opportunity to speak with you today about 

NGP’s Blue Mountain prospect. I am enormously proud of our accomplishments at the Blue Mountain geothermal site and look forward to many years of clean energy production at this facility. 

I would be happy to answer any questions the members of the 

Subcommittee might have. 

[Prepared statement of Mr. Fairbank follows:] 

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Mr. JORDAN. Great. Thank you, Mr. Fairbank. 

Mr. Ahearn. 

STATEMENT OF MICHAEL J. AHEARN 

Mr. AHEARN. Chairman Jordan and members of the Committee, 

my name is Mike Ahearn. I am the Chairman of the Board of First 

Solar. Thank you for the opportunity to appear before the Committee today to offer my perspective on the Department of Energy’s 

Loan Guarantee Program. 

First Solar is the lowest cost solar module manufacturer in the 

industry, one of the largest solar module manufacturers in the 

world, and the global leader in developing and constructing utilityscale photovoltaic power plants. We have produced 6 gigawatts of 

solar modules, representing an estimated $15 billion or more solar 

power installations. We are headquartered in Tempe, Arizona, and 

our global R&D and U.S. manufacturing centers are located in 

Perrysburg, Ohio. 

In addition to our 1,800 associates in the U.S., our manufacturing and project development activities support more than 7,000 

additional U.S. supply chain and construction jobs. Last year alone 

we spent more than $1 billion with U.S. suppliers in 35 States for 

everything from glass to steel components. We trade on the 

NASDAQ and we are currently the only renewable energy company 

listed in the S&P 500. 

First Solar’s success reflects over two decades of entrepreneurial 

struggle, innovation, and effective public-private partnership. Our 

core thin-film semiconductor process technology was developed in 

the early 1990s in partnership with the National Renewable Energy Laboratory. In 1999 we formed First Solar and committed 

venture capital funding to commercialize the technology. A project 

we thought would require two years and $40 million ended up requiring six years and over $100 million of venture capital, as we 

encountered and eventually solved a number of problems typical of 

startup technology companies. 

After solving the core commercial problems, we grew exponentially. Between 2005 and 2009, aided by generous market subsidies 

in Europe and technical assistance from NREL, Sandia National 

Laboratory, and Brookhaven National Laboratory, we scaled our 

annual production volume fiftyfold, from 20 to over 1100 

megawatts; expanded our workforce tenfold, from 200 to over 2,000 

associates; reduced our manufacturing costs by nearly 70 percent; 

and established ourselves as the global industry leader. 

In 2008 we decided to expand beyond manufacturing and selling 

solar modules to become the first company to engineer and construct large PV power plants for the utility market. Photovoltaics 

to that point had been largely relegated to smaller distributed generation systems and were generally considered too costly to compete with wind and geothermal power. To meet the cost and performance requirements of utilities, we vertically integrated our 

business into the design, engineering, and construction of solar 

power plants, and, in parallel, we implemented a number of R&D 

programs and initiatives to reduce costs, improve plant reliability, 

and effectively integrate large solar plants onto the grid. 

47 

With now over 2 gigawatts of power plants completed or under 

construction, we have demonstrated our ability to meet the exacting standards of the utility industry. Our advanced technology, innovative system designs, and economies of scale have enabled steep 

cost reductions and accelerated construction cycles. Our plant monitoring and control capabilities have validated the reliability and 

grid compatibility of our power plants. 

By consistently delivering on our promises, we have earned the 

business of some of the most respected companies in the electric 

utility industry, including APS, Exelon, GE, NextEra, NRG, PG&E, 

Sempra, Southern California Edison, Southern Company, and MidAmerican. These accomplishments have enabled us to launch a 

major initiative to expand to new markets across the globe without 

the need for expensive solar subsidies. 

Our success story came close to ending in early failure. The financial sector meltdown and economic downturn in 2009 jeopardized the entire market for renewable energy, including First Solar’s 

efforts to enter the utility market. The timely and effective intervention by Congress through the American Recovery and Reinvestment Act, by the Treasury Department through the Section 1603 

Program, and by the DOE through the Loan Guarantee Program 

helped to ensure near term liquidity in the project finance market 

and fostered the develop of more robust private project finance 

markets. These initiatives acted as both an interim lifeline and a 

bridge to the future, and for that we are sincerely grateful. 

In recent months, the European solar subsidies that historically 

supported the industry have declined sharply, impacting First 

Solar and the rest of the industry. However, largely because of our 

successful expansion into the utility market, we remain financially 

strong and well positioned to execute through the current market 

environment. 

I am aware that questions have arisen regarding the DOE’s Loan 

Guarantee Program, including questions about First Solar’s applications. First Solar worked diligently and transparently with the 

DOE to ensure that sound results were achieved for each of these 

projects. 

I would like to thank the Committee again for the opportunity 

today, and I welcome the chance to answer your questions. 

[Prepared statement of Mr. Ahearn follows:] 

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Mr. JORDAN. Thank you, Mr. Ahearn. 

Mr. WOOLARD. Last one. Go right ahead. 

STATEMENT OF JOHN M. WOOLARD 

Mr. WOOLARD. Good morning, Mr. Chairman, Mr. Ranking Member, and members of the Subcommittee. My name is John Woolard. 

I am President and CEO of BrightSource Energy. I have two decades of experience in the energy and environmental sectors as an 

executive, an entrepreneur, and an investor. 

BrightSource designs, develops, and deploys large-scale concentrating solar thermal technology to produce high-value steam for 

electric power, petroleum, and industrial-process markets worldwide. 

Our technology is very different from solar photovoltaic, or PV 

energy, the kind you typically find on rooftops. Our projects, thousands of mirrors, called heliostats, continuously track the sun 

through the day and we focus light onto a solar receiver which sits 

on top of a tower. We generate power similar to traditional power 

plants like coal or natural gas by creating high temperature steam 

to turn a turbine to generate electricity. Our technology has been 

tested and proven in the field to the satisfaction of several independent engineering firms at two smaller scaled facilities. 

Our partners and investors include some of the world’s best 

known companies. Our investors include private equity firms, strategic investors such as Chevron, BP, Alstom, and Google and NRG 

as project investors. We now employ more than 400 people in our 

Oakland and worldwide offices, and we have one of the largest 

portfolios in the United States of signed utility-scale power purchase agreements. 

First, I am pleased to report on the Ivanpah project, with construction management by Bechtel, that is on schedule and within 

budget, and we expect to deliver power to the grid by early next 

year. Ivanpah will generate and sell power to Pacific Gas & Electric and Southern California Edison under 3 of 13 power purchase 

agreements that we have signed with those two large utilities. In 

total, the Ivanpah project will cost about $2.2 billion to build, and 

at 392 megawatts will produce enough power for 140,000 homes 

each year. 

We procure from a supply chain that stretches across 17 States. 

The majority of the materials used to build the project are procured 

domestically and we estimate that approximately 70 percent of the 

project’s value will be captured in the United States. 

The project is creating 1400 construction jobs at peak. The 

project will generate $250 million in earnings for these construction 

workers and, over its 30 year life, will produce $650 million in 

earnings for workers on the site, including the 90 permanent jobs 

required to operate the plant. 

In addition to the supply chain, investment, and labor wages created, the project will also generate $350 million in State and local 

tax revenues over its lifetime. 

Large energy infrastructure projects typically use project finance 

to provide the funds that they need for construction. Consistent 

with this model, the Ivanpah project company is jointly owned by 

NRG, Google, and BrightSource. These equity investors have collecVerDate Aug 31 2005 14:13 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 C:\DOCS\74453.TXT APRIL
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tively committed $598 million to the project company. Under the 

DOE guaranteed loan, the project company is the borrower and has 

contracts with the two largest investor and utilities in California 

to sell all of the project’s power at a fixed price for 20 or 25 years. 

These future cash payments back the loan repayment. 

BrightSource first applied to pre-qualify for a DOE loan guarantee in December of 2006, proposing to use a project finance structure. In April 2011, four and a half years after we first applied, our 

loan guarantee transaction closed. During that period, 

BrightSource funded well over $2 million of independent review by 

world-class engineering, finance, and legal firms selected by and 

operating on behalf of the DOE. 

The loan guarantee program served an important role in the 

market, allowing our technology and project to achieve meaningful 

scale, to drive down cost, validate our technology, and enable a new 

industry to succeed, in short, creating the necessary conditions to 

allow commercial financing. Going forward, we expect to finance all 

of our future projects commercially. 

At BrightSource, we are proud of our company and we are proud 

of the Ivanpah project. I appreciate the opportunity to address the 

Subcommittee and welcome any questions you may have. Thank 

you. 

[Prepared statement of Mr. Woolard follows:] 

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Mr. JORDAN. I thank the gentleman. 

I thank all of you for your testimony today. 

Mr. Woolard, do you agree with Mr. Kats and Mr. Kucinich that 

the 1705 program is working had has worked well? Yes or no? 

Mr. WOOLARD. I believe that the project works very well for 

project financings where you have a large utility—— 

Mr. JORDAN. And do you think it worked well in your particular 

case? I think on page 5 of your testimony, ‘‘the DOE’s review process was extremely thorough and marked by thoughtful analysis.’’ 

So you thought it worked well in your situation, their agreement 

to give you, how much money did you get, by the way, from the 

Department of Energy in the loan guarantee? 

Mr. WOOLARD. I fully agree with that statement. We got $1.6 billion, and it was a very thorough analysis. 

Mr. JORDAN. Thorough and thoughtful analysis is your statement 

here. And do you believe you received the loan guarantee, there 

was any political influence at all involved in that decision, or was 

it based completely on the merits of the project, the Ivanpah 

project, and your particular company, BrightSource? 

Mr. WOOLARD. I believe it was completely on the merits of the 

project. We started the application in 2006 and went through a 

four-year cycle. 

Mr. JORDAN. Okay, okay. Well, this is where I am confused, because you guys gave us 30,000 documents on Friday and contained 

in those documents, I am going to put the first email up, if I could, 

was an email. Because today you are telling us it was thorough and 

thoughtful analysis and there was no political influence, and yet we 

have this email correspondence between you and Matt Rogers. 

Matt Rogers, Senior Advisor to the Secretary of Energy for the Recovery Act, so this is the guy who decides things. 

You say in this email, I think it is interesting the very first thing 

you say is please don’t distribute this, we wouldn’t want the taxpayers to know what is going on with our money. But down in this 

email, the last sentence you say Department of Energy’s credibility 

is thin and I am currently trying to put off communications with 

people on the Hill. 

So which is it? Today you say they are thorough and thoughtful 

and it is a good program and great analysis, but in this email, 

when you are trying to get the money, you say their credibility is 

thin. Which is it? 

Mr. WOOLARD. I never said they were fast. So as we went on—— 

Mr. JORDAN. No, no, no, this is not about timing, this is about 

credibility. You used the word credibility in this email. 

Mr. WOOLARD. No, it is very much about timing, if you allow me 

to explain. We had actually invested quite a bit of money at 

BrightSource in moving the project forward, and we had a conditional commitment and the transaction had been contemplated to 

close in September of 2010—— 

Mr. JORDAN. January 4th, 2010. 

Mr. WOOLARD. Yes, September 2009. 

Mr. JORDAN. Well, let’s move to the second thing, because you 

just said it was completely based on the merits of the project. Can 

you see the big print up there where it says also, that last paraVerDate Aug 31 2005 14:13 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6633 C:\DOCS\74453.TXT APRIL
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graph, next to last paragraph that starts with also? Can you read 

that first sentence for me? 

Mr. WOOLARD. Also, Darby at PG&E, that sentence? 

Mr. JORDAN. Yes. 

Mr. WOOLARD. Also, Darby at PG&E talked directly to Obama 

about the program’s challenges and the bad situation it puts him 

in. 

Mr. JORDAN. Now, who is the Darby in that, is that the head of 

Pacific Gas & Electric? 

Mr. WOOLARD. Yes. Peter Darby was the CEO of PG&E—— 

Mr. JORDAN. And they had a vested interest in getting this thing 

approved because you were providing them with the required commitment for green power, right? 

Mr. WOOLARD. Yes. PG&E was very dependent on—— 

Mr. JORDAN. And is the Obama in this sentence, in your email 

sent to the guy who is making the decision, is the Obama the 

Obama I think it is, the President of the United States? 

Mr. WOOLARD. Yes. I had been told—— 

Mr. JORDAN. So wait a minute, now. So just a minute ago you 

told me there was no political influence in deciding this, and yet 

in an email you sent to the guy who is making the decision, you 

reference the President of the United States, who just had, according to this email, had a direct conversation with the guy who cares 

pretty deeply about this thing getting approved. So, again, which 

is it? 

Mr. WOOLARD. For our project—— 

Mr. JORDAN. Was it based on the merit and were they thorough 

and thoughtful, or were they no credibility and based on politics? 

Mr. WOOLARD. Our project, I can assure you, was based on the 

merits as I went through the process. 

Mr. JORDAN. So then why did you think it was necessary to tell 

the guy who makes the decision that a guy who you know pretty 

well, who must have communicated to you directly, talked directly 

with the President of the United States? 

Mr. WOOLARD. Mr. Chairman, with all due respect, what I believe—— 

Mr. JORDAN. I am just trying to clear up the confusion. 

Mr. WOOLARD. I would like to help. What I believe that Peter 

Darby was saying, I don’t know, was that he had many projects 

under this loan guarantee program, I believe a significant portion 

of many of his projects was dependent on this, and it had—— 

Mr. JORDAN. But the key is you thought it was important enough 

to cite in an email to the guy who is in charge of making the decision, and one month after this email you got the conditional approval. 

Let me go to the next email, if I could. This was amazing to me. 

I mean, this is just amazing. This is another email from you to Jonathan Silver, Executive Director of the Loan Guarantee Program, 

and the email you start off please see below a draft of the email 

our chairman, John Bryson, who is now the Commerce Secretary, 

chairman of your board, is preparing to send to the White House 

Chief of Staff Bill Daley. 

So you are asking the guy who is in charge of making the decision, now you are past the conditional, this is the final guarantee. 

62 

You are asking the guy to proofread an email that your chairman 

is going to send to the White House chief of staff. And you say 

there was no political involvement? I mean, this is amazing. 

The person who makes the decisions, this is not some kid asking 

their mom to proofread their homework; this is the taxpayer dollars by the guy who is going to decide and you are saying, hey, can 

you proofread this, even though you are going to make the decision, 

because we want our chairman, who is going to be the next Commerce Secretary, we want him to send a letter to the White House 

chief of staff? And then you just said two minutes ago that there 

was no political involvement in the decision to give your company 

$1.6 billion of taxpayer money. 

Mr. WOOLARD. I believe that everything we did in our project 

was fully on its merits. It is a very solid project. 

Mr. JORDAN. I think it would be interesting to see what Mr. Nelson thinks. Do you think it is customary for a company to be able 

to say to someone who is going to decide whether they get a loan 

guarantee or not, hey, proofread this letter that our chairman is 

going to send to the White House Chief of Staff, that we are going 

to send to Bill Daley? That is unbelievable. 

Mr. WOOLARD. I believe that the letter that was contemplated to 

be sent was all around the program itself and making sure that the 

program—— 

Mr. JORDAN. Well, you read this letter; we need guidance and 

support from the White House. You know, that is amazing. Dear 

Bill, we need a commitment from the White House to quarterback 

the loan closure between OMB and DOE by March 18th. Mr. White 

House Chief of Staff, can you approve this by a certain date, we 

need this? Unbelievable. 

Let me just put up one last thing, because I know I am out of 

time and I want to get to the Ranking Member. 

Let me put up, because we have the Chairman of the full Committee here. I want to put up what the Secretary said to us just 

two months ago in questions that I asked him. Mr. Secretary, how 

about John Bryson, former chairman of the board at BrightSource, 

now the Secretary of Commerce, did that in any way influence your 

decision to give a loan guarantee to BrightSource? The Secretary 

said no. Did the White House ever talk to you about any of these 

respective companies involving these individuals? Did someone 

from the White House, chief of staff, someone from the White 

House call you? And the Secretary said no. 

Mr. Chairman, I think we have to have the Secretary back in 

here because certainly his response to those direct questions certainly doesn’t square with emails we got in a batch of 30,000 documents on Friday from BrightSource, and I think it is important—— 

Mr. ISSA. Would the gentleman yield? 

Mr. JORDAN. I would be happy to yield to the full Committee 

Chairman. 

Mr. ISSA. I will commit to you today that we will invite the Secretary back to clarify the record, along with letters to the Administration asking to waive the normal presidential exclusion of conversations, since it is clear that there was direct conversation leading to a form of favoritism for BrightSource. We will ask the PresiVerDate Aug 31 2005 14:13 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6633 C:\DOCS\74453.TXT APRIL
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dent to give us the records of those conversations with PG&E and 

others. 

Mr. JORDAN. I thank the Chairman. 

Mr. Chairman, I would just ask this, too. To my knowledge, this 

is the first time we have had any direct link to the White House 

in the 1705 program, is that correct? 

Mr. ISSA. To my knowledge, this discovery is the first. 

Mr. JORDAN. I have gone over time and I will be generous with 

the time to the Ranking Member, the gentleman from Ohio—— 

Mr. ISSA. Mr. Chairman, if I could ask unanimous consent just 

to place my opening statement in the record and to include clarification as to the Ranking Member’s slide he used in his opening 

statement. I would like to, if you will, the gentleman from Ohio is 

my long-time friend, but I think we can shed light on the fact that 

those ratios, if stated effectively, including the fact that the oil industry only receives a 6 percent credit under 199, where any other 

manufacturer, such as those in your district, Mr. Kucinich, receives 

a 9 percent. If you discount where they get 3 percent less, rather 

than the same amount as every other manufacturer in America, I 

believe we can provide additional charts that will fairly reflect 

other views. 

Mr. KUCINICH. Reserving the right to object, I would be happy 

to have you submit that and we will then, of course, engage in a 

colloquy through the record where we will respond to what you are 

submitting. Withdraw any objections and just be delighted to—— 

Mr. ISSA. I look forward to it. Thank you. 

Mr. KUCINICH. Okay. 

Mr. JORDAN. If I could just have one last question for Mr. 

Woolard before yielding to the gentleman. 

So, Mr. Woolard, I just want to be clear for the record. You stick 

by the statement you said just a few minutes ago, that there was 

no political influence exercised in the decision by the Department 

of Energy to grant you $1.6 billion in a loan guarantee? 

Mr. WOOLARD. Yes, sir. To the best of my knowledge, this project 

was judged on its merits through its process. 

Mr. JORDAN. Okay, great. 

Yield now to the gentleman from Ohio. 

Mr. KUCINICH. I don’t often share the concerns and objections of 

my colleagues on these kinds of matters. Matter of fact, my opening 

statement made it very clear I have a different point of view. But 

I have to say this issue of potential political influence on these 

loans ought to be looked at. That is why I am going to submit to 

the record a letter to Secretary Chu from Governor Arnold 

Schwarzenegger that supports BrightSource Energy’s project application. 

Mr. ISSA. If the gentleman would yield. 

Mr. KUCINICH. I—— 

Mr. ISSA. I would join with you in encouraging that. As you 

know, my former governor was the author of those mandates that 

created the very opportunity for these businesses to have a 20-year 

guarantee with coerced forcing of public utilities, whether it penciled out or not, to have renewables. 

Mr. KUCINICH. Well, reclaiming my time. I just want to say that, 

let me ask the Chair—— 

64 

Mr. JORDAN. Without objection. 

Mr. KUCINICH. Would the Chair then invite our friend, Governor 

Schwarzenegger to this Committee to explain why he supported the 

same BrightSource Energy project that the Obama Administration 

supported? So we either have here a case of bipartisan influence 

or bipartisan agreement, and the result could be good. We may actually have here one of those extraordinary moments where we 

have leaders on both sides of the aisle that agree and support a 

project that should have been supported. 

Mr. ISSA. If the gentleman would yield. I will personally call my 

dear friend, Governor Schwarzenegger, former governor, and invite 

him. I suspect that if he can get away from his busy schedule of 

new movies, that he will honor us with his presence. But I will personally call him. 

Mr. KUCINICH. That would be great. Thanks, Mr. Chairman. 

I would like to now go to my questions. And I think that, based 

on the clock, I probably have five minutes here. 

Mr. ISSA. I would ask unanimous consent the clock be reset to 

at least six minutes. 

Mr. KUCINICH. Thank you very much, Mr. Chairman. See how 

Democrats and Republicans get along, not only on this panel, but 

also with our energy policy. 

[Laughter.] 

Mr. KUCINICH. Now, the Majority published a report in which 

they concluded ‘‘The Committee identified many cases where the 

DOE disregarded their own taxpayer protections, ignored lending 

standards and eligibility requirements, and, as a result, amassed 

an excessively risky loan portfolio.’’ 

Bloomberg Government came to a different conclusion. 

Bloomberg recently studied DOE’s 1705 Loan Guarantee Program. 

The title of that report is Beyond Solyndra: An Analysis of DOE’s 

Loan Guarantee Program. I ask unanimous consent that it be 

placed in the record. 

Mr. JORDAN. Without objection. 

[The information follows:][This report can be found on-line at: 

http://about.bgov.com/2011/12/01/bgov-study-solyndra-failure-obscures-low-risk-energy-guarntees/] 

Mr. KUCINICH. Bloomberg concluded that the 1705 DOE loan 

portfolio is ‘‘composed of predominantly lower risk projects.’’ 

Question to Mr. Kats. Is the Majority’s report correct or is 

Bloomberg Government? And did DOE amass an excessively risky 

portfolio or is the portfolio composed of predominantly low risk 

projects? 

By the way, I want to ask that the slide showing the distribution 

of projects within the entire portfolio, could we put it up on the 

monitors? 

Finally, Mr. Kats, I need brief answers. I have a whole bunch of 

questions I have to go through in the next five minutes. So could 

you give me an answer? 

Mr. KATS. I think Bloomberg is pretty clearly right. The default 

rate, by the time you assume all defaults come in at one-quarter 

of what is budgeted. That is the bottom line. 

Mr. KUCINICH. Okay, the slide shows the vast majority of 

projects funded through 1705 were power generation projects. What 

65 

is the difference between the risks associated with power generation projects, as compared to manufacturing projects, Mr. Kats? 

Mr. KATS. Power generation projects are typically based on longterm contracts with a utility or some other entity; whereas, a manufacturer, it is higher risk because it goes into the company. In 

some cases the companies have long-term contracts; sometimes 

they don’t. So, again, the power generation contracts are very low 

risk because you have long-term agreements to buy the power generated from the funded assets. 

Mr. KUCINICH. So as I understand it, one reason why the portfolio can be considered low risk is because most of the projects that 

receive 1705 loan guarantees are for power generation, and DOE 

required these companies to have long-term agreements in place 

with nearby utilities to purchase the power once built. This means 

the projects have a guaranteed income stream, which greatly limits 

any risk of default, is that true? 

Mr. KATS. Exactly. 

Mr. KUCINICH. Okay. 

Now, Mr. Woolard, do you already have agreements in place to 

sell power to major utilities once the projects are completed? Brief 

answer. 

Mr. WOOLARD. Yes, sir. All power is sold for 20 years. 

Mr. KUCINICH. And you did that because DOE required that you 

have those agreements before you received any Federal loan guarantee, is that correct? 

Mr. WOOLARD. I believe that the loan guarantee depended on 

those long-term power purchases. 

Mr. KUCINICH. Some may ask why the Federal Government 

should do anything that could cause loss of taxpayer dollars, as any 

loan guarantee program can. 

Now, Mr. Kats, why did Congress design the 1705 Loan Guarantee Program to choose projects that would have some degree of 

risk associated with them? 

Mr. KATS. Because these are projects that are probably otherwise 

unable to get funding. 

Mr. KUCINICH. Would it have been possible for DOE to accomplish the goal of the law, to spur technological advances to renewable energy technology, without incurring any risk of losses? 

Mr. KATS. No, because if it had gone for risk-free projects, those 

would have been projects that would have gotten private sector 

funding. 

Mr. KUCINICH. Okay, so you have Congress appropriating $2.47 

billion as a kind of insurance fund to cover project losses. That is 

about 15 percent of the total amount of loan guarantees. Now, detractors of this program like to point to the bankruptcy of Solyndra 

to discredit the entire program, but the actual amount of losses is 

much lower. 

I am going to ask staff to put up the slide showing projected 

losses compared to much smaller actual losses. 

[Slide.] 

Mr. KUCINICH. Now, Mr. Kats, if Congress set aside money to 

cover project losses, and then one or several companies ended up 

causing losses, would you say the entire program is a failure or 

that it is working as designed? 

66 

Mr. KATS. No. As a venture capitalist and as a PE investor, it 

is very clear that when you make a portfolio of investments, you 

hope that many will succeed; you expect a few to fail. What is impressive about this DOE loan program is how few have failed. The 

actual defaults are about 2 percent; that is, by the time you anticipate all of the defaults coming through, only one-quarter of the defaults that were budgeted and projected will occur. So by any reasonable measure this has been a very successful program that 

should be extended and expanded. 

Mr. KUCINICH. So do you expect a default rate of the 1705 loan 

guarantee portfolio to exceed the 15 percent threshold that Congress itself anticipated? 

Mr. KATS. No, it will be much less than that, perhaps one-quarter. 

Mr. KUCINICH. So you expect it to be about a quarter? 

Mr. KATS. Correct. 

Mr. KUCINICH. Okay. And a quarter of? 

Mr. KATS. A quarter of the 15 percent. In other words—— 

Mr. KUCINICH. Okay, so the program, as I said in my testimony, 

you said in yours, the program is performing better than expected 

in financial terms. But how is the program performing in terms of 

policy? Are the 1705 program financings spurting technological advances or not? 

Mr. KATS. Absolutely. These are breakthrough technologies. We 

have heard from the CEOs here. For the U.S. military, this is one 

of their most important strategic objectives. 

Mr. KUCINICH. Mr. Ahearn, what do you say? 

Mr. AHEARN. The projects that we are building currently would 

not have been financed and would not be under construction if it 

were not for the loan guarantee—— 

Mr. KUCINICH. Is the program performing in terms of policy, yes 

or no? 

Mr. AHEARN. As relates to the types of projects that Mr. Woolard 

and I and Mr. Fairbank are discussing, yes, it is performing. 

Mr. KUCINICH. Well, the whole point of this hearing it seems to 

me is that my colleagues, my friends on the other side of the aisle 

seem to believe the Federal Government should not invest in green 

energy technologies. One expects my friends to be pro-business, but 

on this Committee we seem to have some confusion about that. 

Mr. Kats, Ahearn, Willard, in the one second that remains, what 

is the risk of doing nothing? What would it mean for your industry 

and the economy in the long run if my colleagues got their wish 

and there was never a 1705 loan guarantee? 

Mr. AHEARN. Make the Chinese very happy and the U.S. military 

very unhappy. 

Mr. KUCINICH. Mr. Ahearn? 

Mr. AHEARN. Well, maybe I differ slightly on some of these 

points—— 

Mr. KUCINICH. I am out of time. 

Mr. AHEARN.—the bridge has allowed us to advance the private 

markets. 

Mr. KUCINICH. Mr. Woolard? 

Mr. WOOLARD. I believe that we would lose U.S. competitiveness 

worldwide because building things up in our backyard is important. 

67 

Mr. KUCINICH. Okay, thank you. 

Mr. Chairman, thank you. Appreciate it. 

Mr. JORDAN. I thank the gentleman. 

I am confused again. Now, which is it? Is this loan guarantee 

program so great and these companies are so wonderful this is 

apple pie, and yet Mr. Kats says they couldn’t get funding in the 

private sector? It can’t be like this is so wonderful, but we need the 

taxpayers and we need political influence to make sure the taxpayer money gets put at risk. Mr. Nelson didn’t have any of that 

and he was able to—again, I am confused. It is so wonderful. And 

is the standard only a couple of companies, only 2 percent, 4, whatever the number is, are going to fail? Is that really the standard 

we want? 

Mr. KUCINICH. Would the gentleman yield? 

Mr. JORDAN. I would be happy to yield. 

Mr. KUCINICH. I think that you have a witness who has presented he didn’t need help, and we have other witnesses who say 

that without this we wouldn’t be able to be competitive. So maybe 

both things are true. 

Mr. JORDAN. Yield now to the gentleman from Tennessee, Mr. 

DesJarlais. 

Mr. DESJARLAIS. Thank you, Mr. Chairman. And thank the witnesses today. 

I think maybe only in Congress can we come out and testify that 

the results are better than we thought they would be or, in other 

words, we are not failing as bad as we expected. We look at this 

questioning today and I look at it from the standpoint of the taxpayers, as we all should. 

Mr. Ahearn, when you started your testimony, it sounds like 

First Solar is a pretty good solid company? 

Mr. AHEARN. Yes, sir, it is. 

Mr. DESJARLAIS. It is doing well? 

Mr. AHEARN. Yes. 

Mr. DESJARLAIS. Okay. And without the Government help or the 

taxpayers’ help you don’t think the company would be doing this 

well? 

Mr. AHEARN. I think we would be doing very well. Without the 

help we would not have been able to enter the U.S. utility market 

with these projects. 

Mr. DESJARLAIS. Okay. Now, you said that the company is traded 

on NASDAQ? 

Mr. AHEARN. Yes. 

Mr. DESJARLAIS. How did it rank last year in terms of other companies on the S&P? 

Mr. AHEARN. I am not sure I understand what the ranking criteria would be, but if you are referring to the stock price, the stock 

price declined last year, in line with the industry. 

Mr. DESJARLAIS. Okay. In 2008 it traded at over 300 shares, is 

that right? 

Mr. AHEARN. Yes. 

Mr. DESJARLAIS. Okay. And currently trades about $17? 

Mr. AHEARN. Yes. 

Mr. DESJARLAIS. If I told you it was the worst performing S&P 

stock in 2011, would that surprise you? 

68 

Mr. AHEARN. It would be out of line with the strong fundamentals of our company, but I don’t know the statistics on the stock 

price. 

Mr. DESJARLAIS. And you are Chairman of the Board and former 

CEO? 

Mr. AHEARN. Yes. 

Mr. DESJARLAIS. Okay. Do the executives at First Solar have a 

lot of confidence in the company’s performance? 

Mr. AHEARN. Yes, they do. We all do. We feel like we have been 

built a fundamentally extremely strong company that has got a 

great platform to expand our markets and our business. 

Mr. DESJARLAIS. Do you know in 2008, or starting in 2008, about 

how much money that First Solar executives pulled out of the company, in other words, selling their own stock? 

Mr. AHEARN. No, I don’t. 

Mr. DESJARLAIS. Two point one billion dollars. And I think you 

yourself pulled out roughly $400 million? Is that right? 

Mr. AHEARN. I don’t know the dates, but I did sell stock over an 

extended period of time, that is correct. 

Mr. DESJARLAIS. Okay. Well, this program that we are trying to 

decide whether it is good or bad, 22 of the 26 prospects on these 

loan guarantees were rated basically as junk. So when you say the 

company is doing well, your executives clearly didn’t have the confidence; they were pulling their own money out. Yet, you think it 

is okay for the taxpayers to invest in this? 

Mr. AHEARN. Well, with all due respect, I disagree with the 

statement that the executives didn’t have confidence. We have a 

deeply committed team. There is a lot of money still invested on 

the part of that team and we are focused and growing, and we are 

fundamentally strong. So I disagree—— 

Mr. DESJARLAIS. Okay, so if it is $300 a share to $17 for the executives, I guess you just got out as good timing? 

Mr. AHEARN. Look, I sold my shares over a multi-year period 

under transactions that were fully and properly disclosed—— 

Mr. DESJARLAIS. Okay. Well, that is your business. Let’s move 

on. 

Did First Solar pressure the Department of Energy to approve its 

three loan guarantee projects by promising that the loan guarantees would enable First Solar to build a new manufacturing plant 

in Arizona that would create new jobs? 

Mr. AHEARN. No, we did not. 

Mr. DESJARLAIS. Could we put up slide three? 

[Slide.] 

Mr. DESJARLAIS. Does that look familiar? 

Mr. AHEARN. I have seen this email, yes. 

Mr. DESJARLAIS. Okay. Would that insinuate that maybe they 

were pressuring them to move forward on this project to—— 

Mr. AHEARN. No, it would not, not at all. These projects were all 

evaluated independently on their own merits. The manufacturing 

facility, which we hope to build at some point in Mesa, was in no 

way connected with the applications or the projects. 

Mr. DESJARLAIS. What is the status of the plant in Arizona? 

Mr. AHEARN. It is on hold. 

69 

Mr. DESJARLAIS. Okay. So you are saying that that wasn’t used 

to entice the DOE to package these loan guarantees, to push them 

to approve it? You didn’t promise that it would create new jobs? 

Mr. AHEARN. We did not promise. The loans were not packaged. 

It was not part of the process. The loans were evaluated specifically 

on each project’s fundamentals. 

Mr. DESJARLAIS. So the plan is not producing solar panels for the 

Department of Energy loan guarantee projects, they are not producing those that First Solar promised? You are saying they didn’t 

promise that? 

Mr. AHEARN. Did not promise that, no. 

Mr. DESJARLAIS. Okay. 

That is all I have for now. I yield back. 

Mr. JORDAN. [Remarks made off microphone.] 

Mr. KELLY. I thank the Chairman. 

Dr. DesJarlais, I think your questioning is right in line. 

You know, one of the things that I think comes into play when 

we have these hearings is that there is a question about respect for 

the people that come in and testify, and I want you to understand 

that we do have the utmost respect for you. But I also want you 

to understand that the most basic responsibility I have serving in 

Congress is respect of the hardworking American taxpayers that 

fund all these projects that you are talking about. 

And I get confused sometimes as to where is it that we are really 

looking to protect and who is it that we are looking out for. And 

I have to tell you, coming from the private sector, I never had the 

luxury of having the Government underwrite loans for me; I have 

always had to provide my own capital, had to provide my own character, had to provide everything from the private sector comes from 

yourself. 

And that is what concerns me, Mr. Ahearn, I have to tell you. 

Your SEC filings, and maybe we can put up a slide. Can we put 

up a slide that shows—I think it is slide 17, maybe. 

[Slide.] 

Mr. KELLY. Because Dr. DesJarlais asked you about the performance of your company. You are saying you have such great confidence in your company and how well your company is doing, and 

I look at it and it goes from $303 a share, I believe. You know what 

it traded at yesterday? It was $15 a share. So I don’t know. I am 

not questioning your investments; I am just questioning when you 

say you think it is doing quite well and you have great confidence 

in the company. Why would you sell so much of your own stock in 

it? Why would you cash in on it? 

Mr. AHEARN. Well, let me give you the reasons why I think it is 

so fundamentally strong. 

Mr. KELLY. No, no, don’t give me that. Really, I look at the chart, 

I don’t think you are fundamentally strong at all. I think your 

shareholders are the ones that tell you in the marketplace you are 

doing a terrible job. But whenever you sell your own shares of 

stock, and the people that are on your executive board sell your 

shares of stock, August 7th, 8th, and 9th you sold almost 700,000 

shares of stock in a three-day period. 

Now, you are voting with your feet. You are getting the heck out 

of a situation, saying I have to get out of this. But what I would 

70 

really like to do, I would like these hardworking American taxpayers to put money into my company. I am the CEO, I know what 

is going on, I have been there from its birth. I am watching this 

thing grow and I have so much confidence in that company that I 

am going to cash out. I am going to take my money and run and 

I am going to ask these hardworking American taxpayers just keep 

funneling money in, because someday, somewhere out there this 

dream is going to come true. 

The hopes and dreams of a company that someday, this is the 

hockey stick, it is flat and someday it is just going to go off the 

charts. Now, we don’t know when that day is coming, but some day 

it is going to be there. Now, I have to tell you I am not going to 

be there to watch it, I am going to cash out now. I am taking my 

money and I am running. But I want you folks out there that go 

to work everyday, get up everyday, go to work, pay your taxes, 

clothe your kids, put food on the table, I want you to continue to 

fund this project because, you know what, some day this is going 

to be great. 

I can’t believe we sit here and we listen to this, and the question 

that comes up is who in the world is funding these projects. It is 

not the DOE. This is not the DOE’s money. This is hardworking 

American taxpayers’ money. And I am so sick and tired of hearing 

about disrespect. We don’t have respect for green energy, we don’t 

have respect for these folks that put everything on the line. When 

you are getting out of something as quick as you can and asking 

taxpayers to go in deeper and deeper and deeper, what message 

does that send? 

Mr. AHEARN. I started this company in 1999 and spent over 10 

years of blood, sweat, and tears—— 

Mr. KELLY. And we started our company in 1953. 

Mr. AHEARN.—and investment—— 

Mr. KELLY. Yes, I understand. But I didn’t have taxpayers bail 

me out. I have to tell you, this is disappointing. You tell me it is 

okay for you to sell $450 million in—$450 million you pulled out, 

is that right? 

Mr. AHEARN. If I may—— 

Mr. KUCINICH. Would my friend yield? 

Mr. KELLY. This is just a yes or no question. 

No, not right now, Mr. Kucinich. 

Mr. AHEARN. I don’t have the numbers, so I don’t know. 

Mr. KELLY. SEC filing. I do have the numbers. I do have the 

numbers. And to sit here and listen to this week after week, month 

after month, and then go back out and listen. When I go back 

home, when I see people paying as much for a gallon as gas as they 

pay for a gallon of milk, when I see people working two jobs to put 

food on the table and clothes on their kids’ back, when I see people 

that worry about whether they are going to have a job next year, 

and then we are telling them, don’t worry about it, we are looking 

out for you. 

No, the respect, the respect comes to the American taxpayer. 

That is who the respect comes from. I have no respect for a situation where the chief executives take their money and run, and ask 

the American taxpayers to continue to fund a project—$300 a share 

to $15 a share and you guys are doing well? I don’t know where 

71 

in the heck you define well, what dictionary you look it up in, but 

this is absolutely abysmal and this is why the American people 

have a great deal of wonderment now and the lack of trust in the 

people they send to represent them. The DOE made a horrible, horrible decision, and continues to do that. 

Mr. Kucinich, I apologize for not yielding back to you, but it hard 

to yield back when I have to go back home and walk in Western 

Pennsylvania and watch people who can’t make their house payments, can’t make their car payments, can’t put food on the table, 

can’t educate their kids, and we find out that we are pouring 

money down an open hole and the chief executive officers bailed 

out and asked the taxpayers to put more money in. 

Mr. KUCINICH. I ask unanimous consent for the gentleman to 

have another three minutes, and I would ask the gentleman just 

to yield briefly to me. 

Mr. KELLY. My time is up, so—— 

Mr. KUCINICH. Unanimous consent so you can have three more 

minutes. 

I share your passion for what happens with taxpayers’ dollars 

that are involved in investments, but I think what would be helpful 

is if we could have the witness respond for a couple minutes and 

explain your position on this and address the concerns that Congressman Kelly has raised. 

Mr. AHEARN. Thank you. Thank you very much. 

Mr. JORDAN. The gentleman may respond. 

Mr. AHEARN. The first point I would make is that the DOE loans 

that we are talking about in this case were not made to First Solar. 

This was not First Solar’s private capital, corporate capital funding. These loans were made to three projects that First Solar is 

supplying product to that are owned by sophisticated utility investors with utility off-takes. So these are projects not funding First 

Solar. This is not the same kind of situation that Solyndra or 

Abound or these manufacturing loans. 

First Solar’s corporate funding is provided by equity funding, 

which initially came through our venture capital company starting 

back in 1999. We took the risk that you are talking about should 

be taken by venture capital and not taxpayers, we took that risk. 

We were successful and able to bring the company public. 

As a public company, there is typically a replacement of venture 

capital money for institutional money. It is a very normal thing for 

venture capitalists, once they take a company public, to sell stock 

over time, get the proceeds so that they can go recycle that back 

into early stage companies. That is what happened here. The sales 

by me and other people on the team have absolutely no reflection 

on our conviction and belief in the company and its fundamentals. 

And if I could just, on the fundamentals of the company, look, we 

have guided to $3.5 billion of revenue this year, net income on a 

gap basis of around $315 million, operating cash flow of around $1 

billion this year. We have pointed out that we have multi-year visibility into demand that will continue to drive strong profits and 

cash flow, and we are now expanding into emerging markets without the need for subsidies, taking what we have demonstrated with 

the benefit of the DOE Loan Guarantee Program and deploying 

that through exports into other markets. 

72 

What happens to the stock price day-to-day is subject to all kinds 

of things beyond our control, not the least of which are short interest investors. So I can’t control that; I can’t speak to it. I can control the fundamentals and I am telling you they are very sound. 

Mr. JORDAN. The gentleman from Pennsylvania wish to respond? 

Mr. KELLY. No. And I understand everything you are saying, but 

I am talking about your personal money. When you are pulling 

money out, you are selling 700,000 shares, and I get it, I get it, believe me. I get it. Venture capitalists will always take a risk that 

is underwritten. The lower the risk, the more money they put in; 

the higher the risk, the more interest they want. These are loans 

that there really is no payback. This is a loan from a DOE that 

really is kind of, it is a gift, it is free money. It really is, it is free 

money. You don’t have to qualify the same way I have to do. 

Listen, believe me, I have been every day of my life. I have had 

to actually go out and borrow money, put up my own collateral, 

have my own skin in the game. So I don’t want to get with this 

stuff. I just came from Disney World, by the way. There is a fantasy land down there too. It is not like this one; you actually have 

to pay your own way there, you don’t get it for nothing. 

But I have to tell you when you tell me that, as a CEO, if Steve 

Jobs had done that, if Bill Gates had done that, what do you think 

these people would think of that? Jobs is getting out of it, must be 

a good investment; I would like to get back in. Gates is getting out 

of it. These guys aren’t pulling out. So I just wonder what was the 

reason for you selling 700,000 shares in a three-day period. Why? 

And the other thing is, why don’t you buy it back now at $15 a 

share? It has to be a real bargain. 

Mr. AHEARN. I think I—— 

Mr. KELLY. Just think what you could buy with the $450 million 

that you got. 

Mr. JORDAN. If the Ranking Member of the full Committee is 

ready, I will go to him. If he wants to wait, I can go to Mr. 

Mulvaney and come back to Mr. Cummings. 

Mr. CUMMINGS. I am ready. Thank you very much. 

Mr. JORDAN. Go right ahead. 

Mr. CUMMINGS. First of all, this question is for our loan guarantee recipients on the panel. Each of your companies received loan 

guarantees for projects you are currently advancing. I believe it is 

legitimate and appropriate for members of Congress and the taxpayers to ask what you are doing with the money, and I am sure 

you would agree with me. Can each of you articulate, or a few of 

you, for this Committee why you believe that a loan guarantee provided by the Government to your projects is a good bet? In other 

words, what are the taxpayers getting in return for their investment? Because I don’t want people to look at this on CSPAN and 

think they are not getting something out of it, that is, the taxpayers. Would one of you or two of you try to answer that as best 

you can? Yes, sir. 

Mr. AHEARN. I would be happy to, yes. In the case of First Solar, 

there are three loans that have been made to projects, large power 

plant projects in California that are owned by sophisticated energy 

companies. These loans have been investment-grade rated, so the 

taxpayers, first of all, will receive a return of all of that money, $3 

73 

billion; they will make a profit in addition to that that totals roughly $1 billion. The funding is allowing for roughly 1200 construction 

jobs over the life of the projects; it is further enabling the industry, 

the renewable energy industry in the U.S. to continue to grow and 

become profitable and export-oriented, which will in turn create 

more jobs So this will prove to be a very prudent and timely—— 

Mr. CUMMINGS. So it really does have a multiple higher effect, 

does it not? 

Mr. AHEARN. Yes, it does. 

Mr. CUMMINGS. Mr. Fairbank, could you answer that same question? 

Mr. FAIRBANK. Yes, sir. We received $98.5 million loan from John 

Hancock, backed by the DOE loan guarantee and the 1705 criteria. 

There was a job criteria. We did create a significant amount of new 

jobs. And another part of the criteria was to allow companies to obtain senior debt financing. We had borrowed money to construct 

the plant in a mezzanine level and we used a good part of the 

money to put in place senior debt financing and replaced some of 

the mezzanine debt. 

Mr. CUMMINGS. Let me just ask this. If DOE followed a mandate 

from Congress when it created the Loan Guarantee Program, then 

each of the products under your stewardship has some risk associated with it. 

Mr. Woolard, can you explain why it is so difficult to find financing in the private sector when bringing innovative technology to 

scale? 

Mr. WOOLARD. Sure. We received our early backing as a company 

from venture capital, who financed the company. We then brought 

corporate investors in, including Chevron, British Petroleum, and 

others. And as we looked at scaling up, the first thing we did was 

de-risk everything with a demonstration facility and grew that 

from a 6 megawatt facility that we did in Israel to a 30 megawatt 

facility for Chevron. And then to go to the large-scale power plants 

that had been proven. There was not technology risk, but to do it 

at the size and scale that was needed, the loan guarantee enabled 

that transition. 

I would like to answer your first question as well—— 

Mr. CUMMINGS. Please do. 

Mr. WOOLARD.—on what the project is doing well for the tax- payer. We have a $1.6 billion loan guarantee that enabled a $2 billion project. There are 1700 jobs onsite today. But, more importantly, behind this there are 10 more projects that we have contractual commitments or power purchase agreements to build. That 

will be $10 billion that will be commercially financed. So this enables the transition from a loan guarantee program to commercial 

financing, and I think that is very important. 

Mr. CUMMINGS. Would you have been able to do all of what you 

just said without the guarantee? 

Mr. WOOLARD. No. We would have likely done a smaller. We 

wouldn’t have been able to do it at the scale that allowed us to 

commercialize. 

Mr. CUMMINGS. You know, the reason why I am asking these 

questions is because I think it is very easy to demonize programs, 

and then a lot of times we don’t hear of the other side of it, and 

74 

that is the benefits that the taxpayer gets, the benefits that, it is 

a situation where the government is working with private industry. 

We always talk about creating jobs, and all three of you have 

talked about jobs being created. But you also are talking about innovation, am I right? 

Mr. WOOLARD. Yes, sir, there is quite a bit of innovation enabled. 

Mr. CUMMINGS. In what sense? How so? Could you just talk 

about that for my last 10 seconds? 

Mr. WOOLARD. Well, we built solar thermal projects in the 1980s 

that used an older technology called parabolic trough. We were 

then able to move to a higher efficiency, higher performance technology because of this program; it enabled that technology shift. 

Mr. CUMMINGS. Thank you very much. 

One other thing, Mr. Chairman. I ask that my opening statement 

be submitted into the record, please. 

Mr. JORDAN. Without objection. 

Mr. CUMMINGS. Thank you. 

Mr. JORDAN. Thank you. 

Mr. JORDAN. We now turn to Mr. Mulvaney, who has been patiently waiting. The gentleman from South Carolina is recognized. 

Mr. MULVANEY. Thank you, Mr. Chairman. Thank you for the 

opportunity to be here today. And thank you also to the Ranking 

Member, Mr. Kucinich, for allowing me to participate. 

Gentlemen, I will be honest with you. On several levels this 

hearing has been very difficult for me to sit and watch. As somebody who comes from the private sector, it is not easy for me to 

sit here and watch you have to defend things that ordinarily 

wouldn’t be any of our business. 

Mr. Ahearn, what you do with your investment capital and the 

company you have built for the last 13 years, and what you might 

want to do to take care of your family and reward yourself for the 

work that you have put in should be none of our business. And I 

desperately want it to be none of our business. 

But recognize the fact that you are not here today because of 

what you do. You are not here today because of stock that you sold 

or any of you here because of what industry you participate in. You 

are here because you have asked us to be here. You have brought 

this on yourselves. And I hate to tell you that, but it goes beyond 

the loan program. I mean, we would be silly, we would be foolish 

to think that representatives of your industry, even if not yourselves as individuals, have spent time walking up and down the 

halls of these buildings in Washington for the last decade asking 

us to make people buy what you sell. 

We have requirements, Mr. Chairman, that we have to purchase 

a certain amount now of our energy from renewable resources. It 

is a Federal mandate. 

You have asked us to do that. I wish that you hadn’t. I wouldn’t 

have supported it, but you asked us to come in and say, look, to 

the American people, you have to buy what these people are selling. I am completely sympathetic to Mr. Kelly, who would like very 

much for the Federal Government to go and tell people they have 

to buy X number of cars and have to buy it from him. But he didn’t 

get to do that. When I was building houses I didn’t get that. When 

75 

I was rolling burritos at a restaurant, there was nothing that said 

people had to come to my restaurant and buy my product. 

Beyond that, the loan program is simply on top of that. Not only 

is the 1703 program, the government guarantee program, and remember, I think this is lost on a lot of people who are participating 

or watching this, 1705 program is different in that ordinarily, 

under the old program, you all would have to pay the credit subsidy cost. 

But under the stimulus program, under the 1705, you didn’t even 

have to pay that; the taxpayers had to pay that. So a little skin 

in the game that you all would have under the 1703 program isn’t 

even there under the 1705 program; it is effectively a free program 

to you folks. And that is why we are here. 

We are not here because we don’t like you as private businessmen. We are not here because we don’t want you to be successful. 

To the contrary. I want you gentlemen to be successful. I want you 

to grow your companies. I want the stock to go back up to $300, 

Mr. Ahearn, because I know it not only benefits you, but it benefits 

every one of your employees who probably has a retirement program that buys that stock. But you have to be here today when you 

ask us to get involved in your business, and you have to be here 

today when you ask us to make people buy what you sell. And I 

encourage you to consider that the next time you come walking up 

and down the hallways and say, I think it would be great if we 

took that renewable component from 10 or 15 to 20 or 25 or 35 percent. Wouldn’t it be great if we had to have more electric vehicles? 

That would be great because we make some of that stuff too. 

I am tired of people coming to the government as part of their 

business plan and saying, look, if we can figure out a way to make 

the government buy our stuff, that will really help us. And, conversely, if we can make the government make what our competitors 

sell illegal, that would be even better. We see that every single day 

and, quite frankly, gentlemen, as somebody who came from the private sector, I am sick of it. I wish you would compete on your own 

merits and that we would compete on our merits in my business. 

Mr. Ahearn, I hear what you are saying, you are saying low-cost 

producer, you are down to $0.73 of kilowatt hours, a tremendous 

success for your company. Please stop asking us to help you do 

that. As bad as I feel for what you have had to go through here 

today, Mr. Ahearn, explaining your stock purchases, you have 

brought every single bit of it on yourself. 

We know it; we have to do it. Mr. Kucinich does. Everybody up 

here knows we just filled out our financial disclosures. What we 

have to tell everybody in the Country every single investment that 

we make that is worth more than $1,000. We have to do that every 

single year. We choose to do that to ourselves when we run for 

these offices. And what you gentlemen have endured today, and 

will endure, because it is not going to get easier, it is going to get 

worse. What you have brought upon yourselves today you have 

brought upon yourselves by coming here and asking us to help you. 

Mr. Chairman, I know that was not going to be my line of reasoning, but it took my five minutes, and I appreciate the opportunity. 

76 

Mr. JORDAN. I thank the gentleman. And, to the gentleman’s 

point, we have with us Mr. Nelson, who did exactly what the gentleman described. He didn’t come ask for help and his company is 

succeeding and we applaud that. 

We will turn now to the gentleman from the full Committee, the 

gentleman from California, Mr. Issa. 

Mr. ISSA. Thank you, Mr. Chairman. 

Mr. Woolard, on September 2nd, 2010, your name appears as the 

CEO of BrightSource, along with Peter Darby as the Chairman of 

PG&E, holding at BrightSource Energy in Oakland, California, a 

fund-raiser for friends for Harry Reid. Do you remember that? 

Mr. WOOLARD. Yes, sir, I do. 

Mr. ISSA. So the Senate Majority leader was pretty important to 

you, important enough for you to hold it in your corporate offices? 

Mr. WOOLARD. With PG&E we have been asked to do this. We 

also have some projects in Nevada as well. 

Mr. ISSA. Yes, I know. Let me ask a question. First of all, did 

you speak to, when was the last time you spoke to the Secretary 

of Commerce, Bryson? 

Mr. WOOLARD. It would have been before he was appointed Secretary of Commerce. I have not spoken to him since. 

Mr. ISSA. So it was during the time, though, that he was the 

chairman? 

Mr. WOOLARD. He was chairman of our company—— 

Mr. ISSA. Right. 

Mr. WOOLARD.—until he was nominated to Commerce, which 

would have been the middle of last year. 

Mr. ISSA. Okay, now, my understanding is it takes a while to get 

vetted, it takes a while to get nominated; it doesn’t happen overnight. So my question is when he was the chairman, you were the 

president, and he wrote his email to Mr. Daley, that was two 

months before he got the job. Weren’t they already in discussions? 

Wasn’t he essentially lobbying for your organization as the heir apparent, the person they were looking at to be Secretary of Commerce and, at the same time, lobbying for you? 

Mr. WOOLARD. No, sir, I don’t believe he actually sent that email. 

We basically decided that was not appropriate to send and ultimately that email was never sent. 

Mr. ISSA. So were there other emails that were sent during that 

period of time to the White House or others at the White House? 

Mr. WOOLARD. No, sir, there was nothing, to my knowledge, that 

was sent. 

Mr. ISSA. So this is just a draft that still was hanging around? 

Mr. WOOLARD. Exactly. We decided that it was not appropriate 

and did not send it. 

In addition, we were very careful with every organization that 

John worked with; he was very, very careful from that perspective. 

Mr. ISSA. Well, it is interesting. The Secretary is the founder of 

the Natural Resource Defense Council, right? And that group, 

while he was heading a public utility, that group actually produces 

and participates in lawsuits that drive up the cost of energy, don’t 

they? 

Mr. WOOLARD. They are an intervener in a lot of siting issues 

with renewables. 

77 

Mr. ISSA. So it is sort of amazing. They drive up the cost of energy, particularly conventional energy, through a series of lawsuits 

and incumbent utilities get paid a markup on whatever their costs 

are, even if those costs are driven up by an organization that is 

founded or participates with people who are insiders. So I do find 

it interesting that he now is supposed to be in charge of making 

America competitive, but in fact has driven up the cost. 

Mr. Woolard and, for that matter, each of you on the panel, your 

company would not exist today if not for the loans and the mandates, is that correct? At least as we know it. 

Mr. WOOLARD. No, sir, I think it would be fair to say that we 

would not be doing as much business in the United States. We 

would be working in other countries, other jurisdictions more heavily without the loans or the mandates. 

Mr. ISSA. Mr. Ahearn, would you say the same thing, that your 

Malaysia factory would still be selling in Europe and you would 

still be in business and you would still be an S&P 500 listed company if not for domestic mandates and guarantees? 

Mr. AHEARN. We would still be a successful company, but we 

would not be in the financial condition, sound financial condition 

we are in, and we would not have successfully entered the U.S. 

utility market. We would be a smaller company without this. 

Mr. ISSA. Isn’t it true that if not for a waiver as to the carcinogens that are in your PVs, that in fact you wouldn’t even in the 

European Union at all? The Union did a waiver for your technology 

to be fielded. 

Mr. AHEARN. No, that is not true. The product isn’t carcinogenic. 

There is a elemental material, cadmium, that is a stable compound. 

Mr. ISSA. But it needed a waiver in the European Union for you 

to field it, didn’t you? 

Mr. AHEARN. It didn’t, no. 

Mr. ISSA. It didn’t? And you didn’t rely on a single study that you 

paid for in order to convince people of that? 

Mr. AHEARN. No, we didn’t. 

Mr. ISSA. You didn’t pay for it or it wasn’t heavily relied on? 

Mr. AHEARN. I don’t remember paying for one, nor that a single 

study would have been relied on. But I think what that is referring 

to is the European Commission undertaking analysis about how to 

regulate photovoltaics and all the various sub-technologies, and 

this question did come into play about what do you do with Cadmium-Teluride because there is cadmium in it, so forth. 

Brookhaven National Laboratory and then several comparable 

groups in Europe had done studies. We also funded studies and I 

think there was—— 

Mr. ISSA. Studies or a study? 

Mr. AHEARN. Multiple. 

Mr. ISSA. Multiple studies. If you could give our Committee copies of those studies, because we were unable to find the quantity 

that you are referring to. 

Mr. AHEARN. Yes. I would be happy to. 

Mr. ISSA. Okay, Mr. Chairman. Thank you. I hope there will be 

a second round. 

Mr. JORDAN. Yes, there will. Thank you, Mr. Chairman. 

78 

The gentleman from New Hampshire, if he is ready to go, we can 

go to him. The gentleman is recognized for five minutes. 

Mr. GUINTA. Thank you very much, Mr. Chairman. 

Thank you all for being here today. I want to talk to Mr. 

Fairbank about your loan guarantee. My understanding is your 

loan guarantee was about $98.5 million, is that accurate? 

Mr. FAIRBANK. That is correct. 

Mr. GUINTA. Okay. Can you tell me what it means when a generation facility is placed in service and online? 

Mr. FAIRBANK. That means the power plant is up and running 

and operating at at least 20 percent of its capacity. 

Mr. GUINTA. Okay. Can you tell me when the Blue Mountain 

project was placed in service? 

Mr. FAIRBANK. It was placed in service in October 2009. 

Mr. GUINTA. And when did Nevada Geothermal receive its loan 

guarantee? 

Mr. FAIRBANK. We received our loan guarantee on September 

3rd, 2010. 

Mr. GUINTA. So a full year after you were online and operational? 

Mr. FAIRBANK. That is correct. And I guess the process from 

when we submitted our application until we got the guarantee, 

that was a 10-or 11-month process. 

Mr. GUINTA. Okay. What was the reason that you wanted the 

loan guarantee when you first started the process? 

Mr. FAIRBANK. We were wanting to have permanent financing. 

We actually had worked with John Hancock to work on a loan from 

John Hancock, and they made the application to DOE. 

Mr. GUINTA. So you had an existing either line of credit or loan 

from John Hancock? 

Mr. FAIRBANK. No, sir. 

Mr. GUINTA. What money did you use to get this online? 

Mr. FAIRBANK. We actually had a facility on commercial terms 

with a senior investment bank in New York to construct the 

project. They withdrew that commitment through the summer of 

2008 and we needed to scramble to obtain a mezzanine debt loan 

from TCW, which was a $180 million facility. At the time we 

thought of that as a bridge loan and we wold be borrowing, we 

thought, $70 million, and then we thought we would go back to the 

banks for the remainder of the money that we needed to build the 

plant. 

As it happened, several months after that, as you know, the 

banking crisis was—none of these banks were operating, so we 

ended up borrowing $180 million from TCW to build the plant. 

That is how we built the plant. 

And then that wasn’t in any way any permanent financing, it 

was, originally we thought of it as a bridge loan. It was a very expensive interest rate and we used it for construction. So we used 

a John Hancock loan that was used by the DOE loan guarantee to 

pay back a portion of that loan. 

We also hadn’t finished our work. We had built the plant, as I 

think you were pointing out, and that is only a portion of the 

project. We had not finished our work on the well field. So a portion of the funds were also to be used to finish the well field. 

79 

Mr. GUINTA. Okay, so you did you have financing, albeit not permanent and at a high interest rate. 

Mr. FAIRBANK. That is correct. 

Mr. GUINTA. You then could not get, through normal channels, 

a bank loan. 

Mr. FAIRBANK. We may or may not have been able to get through 

normal channels a bank loan—— 

Mr. GUINTA. But you mentioned that was around the time of the 

banking crisis, so I am inferring from that that your position would 

be that you couldn’t get access to—— 

Mr. FAIRBANK. Oh, when we were wanting to build the plant? 

Mr. GUINTA. Yes. 

Mr. FAIRBANK. We actually were forced into that loan because we 

had started with our EPC contract and they were given a limited 

notice to proceed, and if we hadn’t acquired the rest of the money 

that we needed to finish the plant, we wouldn’t have been able to 

hold schedule relative to the PPA and we wouldn’t have been able 

to hold the cost, so that the EPC contractor had guaranteed a delivery time and a cost. 

Mr. GUINTA. Okay, but you did have that financing in place and 

you did actually get the plant up and running because the plant 

was operational back in October of 2009. So I guess my point is 

why would you then get a loan in September 2010, a year later? 

To me it sounds not like a loan, it sounds like a bailout of your 

business plan. 

Mr. FAIRBANK. It wasn’t a bailout of the business plan, it was 

putting in place senior debt financing, which is one of the primary 

goals of the 1705 program. 

Mr. GUINTA. Could you get that financing anywhere else? 

Mr. FAIRBANK. We utilized the program that was there. The 

banks were—— 

Mr. GUINTA. Could you get the financing from the private sector? 

Mr. FAIRBANK. It is possible we might have been able to; it is a 

bit speculative whether we would have or not. I am sure that we 

would have found a way. 

Mr. GUINTA. Did you try? 

Mr. FAIRBANK. We—— 

Mr. GUINTA. Or did you just choose to go solely into the 1705 

program? 

Mr. FAIRBANK. Well, we went to the market—— 

Mr. GUINTA. Yes. 

Mr. FAIRBANK.—and we had, my recollection was, four commercial bankers, investment houses make proposals. John Hancock 

made the best proposal, so we basically went with John Hancock 

to see if we couldn’t put together a commercial loan, and John Hancock made the application to DOE because that program was available and it was a great assistance for them to be able to do that. 

I don’t know if Hancock would have done it without the loan guarantee; they said they might. But obviously the DOE loan guarantee 

helped them make their decisions. 

Mr. GUINTA. Well—— 

Mr. FAIRBANK. And we weren’t involved with that; we weren’t 

the applicant for the DOE loan guarantee, that was John Hancock. 

We were involved peripherally. 

80 

Mr. GUINTA. But you were the recipient of the money. 

Mr. FAIRBANK. We were the recipient of the John Hancock 

money, that is right. 

Mr. GUINTA. And you knew that they were going for 1705? 

Mr. FAIRBANK. Yes, sir. 

Mr. GUINTA. Okay. So you have the plant in place, you file the 

application. You say that you had an opportunity in the private 

sector, but for whatever reason you opted not to utilize those loans, 

probably because this one was a better rate. You then repaid existing dollars. So the point of this is that the stimulus, whether you 

agree or disagree with it, the point of it was to create jobs. What 

jobs did this create? This was repaying an existing loan for an existing plant that was already in operation. 

Mr. FAIRBANK. It was operating at 22 megawatts at the time that 

we received loan, so we had placed it in service, but it wasn’t operating at its full capacity, so we had to finish the well field. And I 

think it has been very transparent in our Part 1 application for the 

loan exactly where the money was to be spent. A portion was to 

pay down the TCW facility and a portion was to finish the well 

field. The jobs that—— 

Mr. GUINTA. I just don’t see how the business practice for the Department of Energy—— 

Mr. FAIRBANK. The number of jobs—— 

Mr. GUINTA. Excuse me. Reclaiming my time, sir. I don’t see it 

as a good practice for the Department of Energy to use taxpayer 

subsidized loans to provide to an entity that already has an existing facility. 

Mr. FAIRBANK. Well—— 

Mr. GUINTA. That is my personal point of view, but I don’t think 

taxpayers in this Country want DOE providing taxpayer loans to 

a company to pay back a loan on an existing facility. 

But my time has expired. The Chairman has been very gracious. 

I appreciate it and I yield back. 

Mr. JORDAN. I thank the gentleman. 

Mr. FAIRBANK. I didn’t hear a question there, so I will just not 

address that. 

Mr. JORDAN. Okay, great. 

Gentleman from California is recognized. 

Mr. ISSA. Thank you, Mr. Chairman. 

And just following up on the gentleman’s statement, I share his 

situation, which is if DOE had said, look, we will give you X 

amount of additional money, but you can’t pay back your own associated parent company, you would have still taken the money. Bottom line is money flowed to a loan repayment to yourself, effectively, as part of it, something that is, as I understand it, is prohibited by DOE, but I am not going to ask you if it is prohibited for 

DOE to do it, because they obviously did it, as they did so many 

things that were wrong in the case of these loan guarantees. 

Mr. Woolard, I just want to make sure the record is clear. When 

I asked about your strong support for Senator Reid and obviously 

we went over these letters earlier that show that there was direct 

political influence with the chief of staff and the President, I wasn’t 

implying there is anything wrong in these contributions. I mean, 

ultimately most of the energy companies, including all the public 

81 

utilities in California, have historically supported me; it is not the 

money. I just wanted to make it clear that Senator Reid was very 

important to you, as he obviously was to Mr. Fairbank. 

I want to go back, though, to Mr. Ahearn. I want to make sure 

I get your statement correct, that is why I asked to go first this 

round. You said that you had multiple studies, but isn’t it true that 

by your own PowerPoint, which we have, when it says risk, we are 

almost completely relying on the Vasilis and his team. That is what 

that is, is multiple studies done by one person, isn’t that true? 

Basically, your support for your risk, which is our research ultimately proves, if it proves unpersuasive, essentially this carcinogen 

incorporated and you say not a risk, you had to convince the commission and his multiple studies were a big part of how you convinced them; and a risk was you wouldn’t be selling in Europe if 

his studies, which you did pay for, hadn’t helped bolster your case. 

Now, isn’t that a more accurate statement, rather than your saying that there were multiple studies and you didn’t remember if 

you pay for it? You did pay this organization; you relied heavily on 

it in your own PowerPoint statement, isn’t that true? 

Mr. AHEARN. I respectfully—I need to break that down. 

Mr. ISSA. Okay, did you—— 

Mr. AHEARN. I don’t think that is true, no. 

Mr. ISSA. Did Vasilis receive money from your company for any 

or all of these studies? 

Mr. AHEARN. Not to my knowledge. 

Mr. ISSA. Okay. Were you almost completely reliant on his studies? 

Mr. AHEARN. I would say no. 

Mr. ISSA. Okay, you say no. So the fact that your own 

PowerPoint shows that as a risk? 

Mr. AHEARN. I don’t know the context of this slide or where it 

was made. I am happy to—— 

Mr. ISSA. Well, it was made by you folks and delivered under our 

discovery. 

Mr. AHEARN. I just don’t know the period of time or what that 

was prepared—— 

Mr. ISSA. Oh, I apologize. We got it from a whistleblower, you 

didn’t give it to us. But are you saying that you don’t believe it is 

yours? 

Mr. AHEARN. No, no, not at all. I am just saying I can’t—that 

particular quote, without the context, I am not sure what it means. 

Mr. ISSA. Okay. 

Mr. AHEARN. But I would be happy to give you more—— 

Mr. ISSA. We would be happy to get more of these in discovery, 

since we had to get this from a whistleblower, who basically says, 

look, you were reliant completely on this individual. The whistleblower informs us that you did pay, so we look forward to getting 

that right. And what we are seeing is you needed this to work to 

get into the European Union, and you needed the money to be 

where you are today. 

I am going to ask one question because I have been waiting to 

ask this for a long time, ever since they berated General Motors, 

Ford, and Chrysler when they came in. What kind of jet did you 

fly in on today? 

82 

Mr. AHEARN. I flew in yesterday. 

Mr. ISSA. Yesterday. 

Mr. AHEARN. On a Challenger. 

Mr. ISSA. A Challenger 604, 605? 

Mr. AHEARN. Three hundred. 

Mr. ISSA. A 300. Oh, one of the new superminis. Pretty efficient. 

That was a nonstop flight from, I assume, Tempe? 

Mr. AHEARN. Yes. 

Mr. ISSA. Okay. I just think that if you are so concerned about— 

and I know it is more efficient than the big birds, but is that really 

environmentally sensitive? 

Mr. AHEARN. And let me point out that that has nothing—First 

Solar did not pay for that; First Solar had nothing to do with that. 

Mr. ISSA. Okay. Well—— 

Mr. AHEARN. That is something I did on my own. 

Mr. ISSA. We are not going to ask him if he used the money he 

took out of the company. Staff already has better questions that I 

do; I wouldn’t ask that. 

Let me just ask one more question. Your production facilities, do 

they use your solar panels for the energy that they produce in 

order to manufacture? 

Mr. AHEARN. Not for the energy—— 

Mr. ISSA. Okay. Is it true you looked at California and made a 

decision not to come into California because of two major factors, 

the regulatory environment and the cost of energy? 

Mr. AHEARN. I don’t know that that is the case. I think we looked 

at a number of places and—— 

Mr. ISSA. You ruled out California, the very place that has the 

mandates that help many of your companies succeed because we 

mandate that we buy your much higher, much subsidized cost; it 

drives up the rate payer cost dramatically and makes manufacturing in California undesirable. So you decided not to manufacture 

in a high-cost area. Basically, I see you are in Ohio, which is a lowcost energy area. You are in Tempe, Arizona, a low-cost energy 

area; they even use coal for some of their electricity. So is it fair 

to say that energy costs determine somewhat, in addition to labor 

costs, where you manufacture? 

Mr. AHEARN. I would say it would be one of a number of factors. 

Mr. ISSA. What puts you in Malaysia? 

Mr. AHEARN. We wanted to have a base of manufacturing in 

Asia, as well as Europe and North America, as we were building 

up the company, and at the time, when we assessed the risk returns of the various Asian locations, having never done business in 

Asia, we thought Malaysia was a moderate risk, reasonable place 

to be located. 

Mr. ISSA. I am going to close, but just noting that if these figures 

are still correct, Germany, 560 jobs; Ohio, 280; Malaysia, 1680. It 

sounds like you are not an American company particularly, you 

simply have a small presence in Ohio and another one in Arizona, 

that, in fact, we put an awful lot of money into putting you into 

manufacturing in other countries outside America and that, in fact, 

the loan program dramatically made it possible for you to have 

overseas jobs, not to have American jobs. Is that reasonably correct, that the majority of the jobs that you provide are not in AmerVerDate Aug 31 2005 14:13 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00086 Fmt 6633 Sfmt 6633 C:\DOCS\74453.TXT APRIL
83 

ica and that the loan program facilitated that as much as anything? 

Mr. AHEARN. Well, I would disagree respectfully with the overall 

characterization. 

Mr. ISSA. Not the characterization, just the numbers. 

Mr. AHEARN. In sheer numbers, most of our full-time are outside 

of the U.S. 

Mr. ISSA. Okay, so jobs created with loan guarantees, stimulus 

and others, basically not American. 

Mr. AHEARN. All those jobs are American, all the jobs directly 

created with the loan guarantee. 

Mr. ISSA. Okay, so those jobs wouldn’t be there except for these 

loans, but those other jobs would be is your assertion? 

Mr. AHEARN. The manufacturing offshore would be, but the 

R&D, the engineering, the hub of our business is here that is supported by those. But sheer numbers I agree with you. 

Mr. ISSA. Thank you, Mr. Chairman. I yield back. 

Mr. JORDAN. I thank the Chairman. 

The gentleman from Ohio is recognized, Mr. Kucinich. 

Mr. KUCINICH. I want to thank my friend from California for his 

defense of American manufacturing. Also, it seems that the Majority is raising a new point of view with respect to the use of corporate jets, which I find interesting. 

Mr. ISSA. Dennis, you have warned me down over the years. 

Mr. KUCINICH. I know. We are finally happening. 

I also want to ask unanimous consent—I am glad that my friend 

from California, less recently from Cleveland, pointed out that Senator Reid didn’t do anything wrong here. Matter of fact, I have 

unanimous consent the record of contributions from PG&E to some 

of the most outstanding members of Congress, some of the absolutely best equipped to analyze business members of Congress who 

are included in this list, and I just would ask that that be submitted. 

Mr. JORDAN. Without objection. 

Mr. KUCINICH. And I would also ask any member of the Committee wants to join me on H. J. Res. 100, which would end all corporate contributions, basically turn Federal elections into public financing. H. J. Res. 100. Any of you want to join in? 

Mr. ISSA. Would the gentleman yield? 

Mr. KUCINICH. Of course. 

Mr. ISSA. I assume when you say corporate you mean PAC 

money. You don’t mean corporate. Because corporate money has 

been banned before you and I were born. 

Mr. KUCINICH. Right. All private money. That is what I mean. 

Mr. ISSA. Thank you. 

Mr. KUCINICH. Thank you. 

Okay, now, the question. Mr. Woolard, your January 4th email 

to the DOE official you reference the fact that ‘‘a large group at 

NYC focused on this transaction and DOE ability to execute.’’ This 

email continues: ‘‘Things are not good and there is a sizeable group 

of private equity investment banks writing a letter to Chu about 

the status of the program and inability to get loans through.’’ 

I need quick answers. Mr. Woolard, did this investment group 

have their own money invested in the project? 

84 

Mr. WOOLARD. They did not represent our project; it is a group 

called U.S. PREF—— 

Mr. KUCINICH. Did they have their own money invested? 

Mr. WOOLARD. In multiple projects, quite a few. 

Mr. KUCINICH. Why were they frustrated? 

Mr. WOOLARD. It was private sector money that was coming in 

as the highest at-risk layer of money, the equity tranch. But the 

process at DOE was slow and things had died. 

Mr. KUCINICH. So the DOE review process was drawn out, is that 

what you are saying? 

Mr. WOOLARD. It was very—it took a lot longer than anybody— 

than had ever been expected or been represented. 

Mr. KUCINICH. So why did these private equity investors, in fact, 

send a letter to the Secretary and, if so, what did it say? 

Mr. WOOLARD. I believe what the result of what this group was 

they came down and talked directly to everybody from members, 

anybody who would listen to them, it was a large group, and they 

said that the program was not executing. They had private capital 

ready to deploy in the riskiest tranch, but they needed—— 

Mr. KUCINICH. So would the private investors, utility company 

purchasers and your all, have reason to be critical of DOE’s being 

too thorough in their review of your applications? 

Mr. WOOLARD. That was basically, the theme was that it had 

taken a very long time. We took four years for a two-year process. 

Mr. KUCINICH. Well, okay, the email also says this: ‘‘Darby at 

PG&E talked directly to Obama about the program’s challenges 

and the bad situation it puts him in. DOE credibility is thin and 

I am currently trying to put off comms with Hill until we talk.’’ 

Now, Mr. Woolard, I assume that Darby refers to Peter Darby, 

former CEO of PG&E, correct? 

Mr. WOOLARD. Yes, sir. 

Mr. KUCINICH. And didn’t California recently pass a law requiring utilities to begin purchasing renewable energy in 2014 and that 

as much as 33 percent of any utility’s energy needed to be renewable by 2020? 

Mr. WOOLARD. Yes, sir. The relevant law at the time was 20 percent, and then it has been increased. 

Mr. KUCINICH. Isn’t it also the case that securing a purchaser of 

the energy to be produced at your project was imperative to DOE’s 

evaluation of BrightSource’s loan guarantee application? 

Mr. WOOLARD. Both BrightSource and other loan guarantee recipients were critical. PG&E could not meet the RPS standards. 

Mr. KUCINICH. So what would happen if the DOE continued to 

drag it out, drag out the due diligence? 

Mr. WOOLARD. PG&E was at significant risk with the regulators 

because they wouldn’t have been able to deliver—— 

Mr. KUCINICH. Well, would they have faced sanctions from the 

State if they didn’t meet the renewable energy standards? 

Mr. WOOLARD. I believe so. 

Mr. KUCINICH. So ultimately BrightSource was awarded a conditional commitment in February 2010 and a loan guarantee more 

than a year later, in April 2011, correct? 

Mr. WOOLARD. Correct. 

85 

Mr. KUCINICH. So after all the DOE due diligence, do you believe 

that your DOE loan was awarded on its merits or because of a conversation PG&E’s CEO had with the President? 

Mr. WOOLARD. No, I believe it was all done on its merits. It was 

a very thorough process and it started back in 2006, actually. 

Mr. KUCINICH. Okay, Mr. Ahearn, the Majority’s recent report refers to First Solar’s loan guarantee as a scheme characterized by 

failure to prove innovativeness. In March 2011, however, Arizona 

Governor Brewer praised First Solar’s projects, stating the company’s ‘‘presence in Arizona has been a great engine in driving our 

renewable energy sector forward.’’ Senator McCain praised First 

Solar’s decision to build in Arizona and a top bundler for the Senator’s presidential campaign served on First Solar’s board of directors since 2010. 

Do you believe First Solar’s political connection had any bearing 

on the application process? 

Mr. AHEARN. Absolutely not. 

Mr. KUCINICH. Do you believe that your DOE loan guarantee application was awarded on its merits? 

Mr. AHEARN. Yes, each of them underwent a very rigorous detailed process. 

Mr. KUCINICH. Now, members of Congress, including members of 

this Committee, have sent nearly 500 letters to Secretary Chu in 

support of green technology projects in their districts, both Democrats and Republicans, supported Abound Solar’s loan guarantee 

application. Members of Congress also supported Nevada 

Geothermal’s loan guarantee projects. 

Mr. Witsoe, Mr. Ahearn, do you believe these members of Congress were requesting special treatment of your companies? Mr. 

Ahearn? 

Mr. AHEARN. No, I think they were doing what their constituents 

expect. 

Mr. KUCINICH. Mr. Witsoe? 

Mr. WITSOE. No, not to my knowledge. 

Mr. KUCINICH. So, Mr. Chairman, I don’t really think that—so 

you think they were awarded on the merits, Mr. Witsoe? 

Mr. WITSOE. I know we used the loan to build our new technology. 

Mr. KUCINICH. Awarded on the merits? 

Mr. WITSOE. We doubled efficiency. 

Mr. KUCINICH. On the merits? 

Mr. WITSOE. Yes. 

Mr. KUCINICH. On the merits? 

Mr. AHEARN. Yes. 

Mr. KUCINICH. Okay. 

So, Mr. Chairman, this broad scandal we are talking about, I 

don’t know, I don’t see it. I think we actually have a system here 

that is trying to work and we should stop beating each other up 

on it. But we should invite, yeah, I think it would be good to have 

the private equity people in here too. Thanks very much. 

Mr. JORDAN. I thank the gentleman. 

If we could put back up that email that the Ranking Member 

just cited, the January 4th, 2010, email from Mr. Woolard to Mr. 

Rogers. 

86 

[Slide.] 

Mr. JORDAN. Mr. Witsoe, do you have any communications with 

the Department of Energy where you reference conversations with 

the President of the United States? 

Mr. WITSOE. No, not that I know of. 

Mr. JORDAN. Mr. Fairbank, do you have any communications 

with the Department of Energy concerning your loan guarantee 

program where you reference the President of the United States? 

Mr. FAIRBANK. None whatsoever. 

Mr. JORDAN. Mr. Ahearn, do you have any? 

Mr. AHEARN. Not to my knowledge. 

Mr. JORDAN. Mr. Nelson, do you have any? 

Mr. NELSON. No, sir. 

Mr. JORDAN. Imagine that, you don’t have any. 

Read this paragraph: Also, Darby at PG&E talked directly to 

Obama, not the President, not the President of the United States; 

Obama, about the program’s challenges and the bad situation it 

puts him in, the President himself, I assume that is referring to, 

DOE, Department of Energy’s credibility is thin and I am currently 

trying to put off communications with the Hill until we talk. 

Now, if that is not political influence, I don’t know what is. Think 

about this. This was about a $15 billion program, right? You all are 

competing for some of that money. Mr. Nelson is not. 

It is amazing to me. Mr. Nelson, how did you do it? We have just 

had, now, two hours of the shenanigans that went on. How in the 

heck did you make it? How are you doing it? 

Mr. NELSON. We have a group of committed private citizens who 

love renewable energy, see the future, and have committed the 

funds to our management team and our technology. 

Mr. JORDAN. But you guys are actually, so Mr. Nelson is dealing 

with private investment, he is making it; you guys, though, decided 

to compete for this available dollars. Do you think it is an unfair 

advantage for BrightSource to be able to talk directly to the White 

House? 

Put up the other email. Put up the other email, the one—yes, 

this one. Put up the one right here, where—— 

[Slide.] 

Mr. JORDAN. Now, Mr. Woolard has said under oath today that 

they did not send this. Is that correct, Mr. Woolard? 

Mr. WOOLARD. That is correct. 

Mr. JORDAN. But just the fact, well, let me ask you, Mr. Witsoe. 

Did you ask the people at the Department of Energy if they would 

proofread a letter that your chairman of the board was thinking 

about sending to the White House chief of staff? Did you guys do 

that? 

Mr. WITSOE. No, we did not. 

Mr. JORDAN. Mr. Fairbank, did you have a letter that you sent 

to the Department of Energy, the people who were going to decide 

whether you get the loan or not, did you have a letter that you 

asked them to proofread before your chairman sent it to the White 

House chief of staff? 

Mr. FAIRBANK. We didn’t do anything like that. 

Mr. JORDAN. Okay. 

87 

Mr. Ahearn, did you guys ask the Department of Energy to proofread any correspondence you were thinking about sending to the 

White House chief of staff, pretty important guy? 

Mr. AHEARN. Not to my knowledge, no. 

Mr. JORDAN. So do you think that potentially put you at a competitive disadvantage when you are trying to secure a loan guarantee program and help your company and help your projects? 

Mr. WOOLARD. You know, my view, going through the process we 

did, it wouldn’t have mattered, honestly. I mean, this was a rigorous, very objective—— 

Mr. JORDAN. But at least it raises the concern if a potential competitor for a scarce amount of dollars is citing conversations with 

the President of the United States in correspondence with the people making the decision, that at least raises some whistles and 

some alarm bells, right? 

Mr. WOOLARD. I can understand the appearance. 

Mr. JORDAN. Mr. Fairbank, do you think that raises some concern? 

Mr. FAIRBANK. We received bipartisan support with—— 

Mr. JORDAN. No, no, that is not my question. Do you think correspondence from a potential competitor for a finite amount of 

money, where they cite conversations with the President of the 

United States, where they send a letter and ask them to proofread 

it and them to edits to it, do you think that maybe raises some concern? 

Mr. FAIRBANK. I don’t want to get involved with that. 

Mr. JORDAN. Mr. Witsoe? Might potentially, maybe? Do you think 

maybe a taxpayer would say that might put Mr. Witsoe’s company 

at a little bit of a disadvantage to Mr. Woolard’s company? Do you 

think so? 

Mr. WITSOE. I can only comment that Abound had a fair process, 

and I think that is for you folks to—— 

Mr. JORDAN. Mr. Nelson, do you think it puts you at a little bit 

of a competitive disadvantage? 

Mr. NELSON. No, I don’t. I think ultimately I don’t blame any—— 

Mr. JORDAN. That is an even better answer. That is an even better—we are back to Mr. Mulvaney’s point. We shouldn’t have had 

this goofy program going on in the first place. If you don’t think 

it puts you—you can make—I didn’t expect that answer, I will be 

honest with you, Mr. Kucinich. I didn’t expect that. But that is 

even better. 

Mr. NELSON. I don’t blame any of these gentlemen, who I have 

a lot of respect for, for working within the rules to get every competitive advantage they can, including getting government money. 

The problem is not in their approach; the problem is in the rules. 

Mr. JORDAN. Exactly right. Exactly right. 

Mr. Woolard, here is what I want to know. So you didn’t send 

the correspondence to the White House. What happened in the 

course of applying and going through this process? What took place 

that led you and your company to believe it was okay to ask the 

people who are deciding, hey, can you edit this because we want 

to send this from our chairman, who is going to be the next Commerce Secretary, to the White House chief of staff? 

88 

Mr. WOOLARD. Mr. Chairman, I don’t, frankly, as I go back 

through the last several years, I don’t remember what exactly transpired and would have made something okay or not. Ultimately, we 

decided it was not smart to send and it was not appropriate to 

send, and did not. We wanted to make sure everything was clearly 

done on its merits, which I believe it was, and that was ultimately 

the goal, and we wanted to make sure it was a very clear and unambiguous process. 

Mr. JORDAN. And I want to be quick here because I am over 

time. But I just want to be clear. When an email to the senior advisor to the Secretary of Energy uses this kind of language, Also, 

Darby at PG&E—not Mr. Darby, not the CEO—Darby at PG&E 

talked directly to Obama. When you use that kind of language, this 

is not, Mr. Rogers, I know you work for Secretary Chu and this is 

an important thing. The CEO of PG&E has had the ability to talk 

directly to the President of the—this is casual, hey, we talked to 

Obama. This sounds like this was pretty common; you had some 

kind of relationship with folks at the White House where you can 

use this kind of language in correspondence to the people who were 

making the decision about $1.6 billion of taxpayer money. 

Mr. WOOLARD. Actually, I think it is important to read the language there, and I think it is important to note that Mr. Darby was 

talking about the program. And at that point in time the DOE program was not getting loans out, it was not functioning. The program itself, nothing to do with BrightSource’s loan guarantee, but 

the program was not getting loans done and it was putting not just 

us, but many of his projects at risk. 

Mr. JORDAN. Let me ask you this. To the other email, the draft 

that you asked them to proofread, whose decision was it not to 

send that correspondence to Mr. Daley? 

Mr. WOOLARD. At the end, it was John Bryson and I said that 

is not appropriate and did not do it. 

Mr. JORDAN. And do you think, I am just curious for our panel, 

do you see any concern, confusion, misstatements possibly when 

you look at how the Secretary of Education, Mr. Chu, responded to 

my questions two months ago, where I asked him directly did the 

fact that John Bryson at BrightSource, now the Commerce Secretary, have any influence on your decisions to grant BrightSource 

a loan guarantee of $1.6 billion, when I asked him did he have any 

correspondence with the White House, did any of that influence 

you, and I specifically mentioned the chief of staff, do you guys 

think that there is any concern or confusion there? 

Mr. Nelson? Do you think at least it was worth looking into? 

Mr. NELSON. Yes, I think it is, although I have no basis to believe that it actually happened. But if there is some malfeasance 

in that regard, I would look into it. 

Mr. JORDAN. Mr. Witsoe? 

Mr. WITSOE. I don’t have any knowledge of it. 

Mr. JORDAN. I figured you guys would take that. 

Anyone else want to comment? 

[No response.] 

Mr. JORDAN. I didn’t think so. I didn’t think so. 

We will turn next to the gentleman from Maryland, the Ranking 

Member of the full Committee, Mr. Cummings. 

89 

Mr. CUMMINGS. I yield a minute to Mr. Kucinich. 

Mr. KUCINICH. I thank the gentleman. A couple things here very 

quickly. Going back to the memo from Mr. Woolard to Matt Rogers, 

the paragraph that reads, ‘‘Also, Darby at PG&E talked directly to 

Obama about the program’s challenges and the bad situation it 

puts him in.’’ Now, is this memo talking about the bad situation 

Darby is put in or the bad situation President Obama was put in? 

Mr. WOOLARD. As I read it, it is clear PG&E was in a bad situation. 

Mr. KUCINICH. Okay. So this does not say the President was in 

a bad situation, this is about PG&E and Darby? 

Mr. WOOLARD. Right. In fact, I believe concurrent with this there 

was a public report out starting to discuss their bad situation relative to the loan guarantee program disclosure. 

Mr. KUCINICH. Okay. This comes up with a new aphorism, that 

familiarity breeds investigation. 

I also want to thank my friends from this side of the aisle for 

exploring the mythologies of free market capitalism. 

Mr. Cummings, thank you. 

Mr. CUMMINGS. Mr. Chairman, you have announced your intention to hold a follow-up hearing and you committed to inviting Governor Schwarzenegger, and I would invite you to consider asking 

both Wall Street investors who wrote Secretary Chu and the 

former CEO of PG&E and ask them why they believe this project 

was so important. Would you do that, sir? 

Mr. JORDAN. I will take that up with, the Chairman of the full 

Committee committed to that. I will take that up with Chairman 

Issa. 

Mr. CUMMINGS. Thank you very much. 

Gentlemen, I have been listening to you very carefully. I want to 

go back to something Mr. Nelson said. I believe that all of you are 

honorable people simply trying to carry out a business in a very 

competitive world. And as I sit here and I listen to you, I am convinced that, if I were you, I would feel like I was being beaten up 

on for simply trying to do what was best for your businesses. 

And while we are sitting here going through this, there are people all through these United States that both parties claim they 

want to see become employed, millions upon millions of them hoping and praying that they can get a job. And part of the stimulus 

bill was to try to get folks employed and I, for one, believe that it 

was quite effective in doing that; I don’t give a damn what anybody 

says. I wish we had more jobs. 

But one of the things that it also was to do, and I quote from 

the law, was to provide investments needed to increase economic 

efficiency by spurring technological advances in science and health, 

and to invest in transportation, environmental protection, and 

other infrastructure that will provide long-term economic benefits. 

The reason why I am getting into this is one of the things that 

we wanted to do was be innovative. I have said from many a podium that while we may go through our economic problems, we 

have to be—and the President said this—we have to be innovative, 

create jobs and be innovative. That is what the United States is all 

about. That is why we are the Country that we are. 

90 

Mr. Nelson, I applaud you for saying what you said. You said you 

believe these guys; these are great guys basically is what you were 

saying. Maybe there is something wrong with the rules, but these 

are great guys being competitive. 

I want to ask you, Mr. Ahearn, talk about innovation with regard 

to the stimulus and jobs. Can you talk about that with regard to 

your company? 

Mr. AHEARN. Yes, I sure can. Well, one way to think about it, 

these three projects we are talking about are the power equivalent 

of an average size nuclear plant. We have built something here 

that has never been done anywhere in the world. In order to build 

solar plants of that size and magnitude, we have had to solve a lot 

of problems that had never been solved before. We now have, even 

though they are not completely constructed, we have people coming 

from all over the world to see what we have done and we have 

begun negotiations and discussions with potential customers in 

markets all over the world. 

As those markets take shape, the innovation and the job creation 

in the U.S. for our business and for our value chain will accelerate 

because the creation of goods and services that are exported into 

these countries to meet their power needs will begin to open up 

and grow massively. And we are really keyed by getting solar off 

the rooftop, into big utility scale power plants, and that did require, 

and still does, the solution of a lot of pressing problems, and it can 

only be done, some of this can be done in a laboratory; some of it 

can only be done in the marketplace, at the project, encountering 

and solving problems. So that is the big piece. 

It directly created an average of 1200 construction jobs, which is 

not trivial. It kept our factory and our supply chain here in the 

U.S. running in a stable fashion, and will for several years. But the 

future, I think, is the export and the innovation that allows us to 

break into new markets, and this has been instrumental. 

Mr. CUMMINGS. You know, Mr. Ahearn, I often say our children 

are our living messages that we send to a future we will never see, 

and listening to what you just said—— 

Mr. Chairman, I just ask that I get two additional minutes like 

Mr. Guinta got. 

Mr. JORDAN. Go ahead. 

Mr. CUMMINGS. You know, the things you are talking about are 

things that I take it will have spinoff into a time when we are 

probably dead, in other words, what you are doing now. Is that a 

fair statement? 

Mr. AHEARN. Absolutely. And there are lots of follow-on effects 

to this. One thing, with our success, we have put down a marker 

in the marketplace where Mr. Nelson and others are now competing to try to beat us. So you have a whole new wave of R&D 

opening. Silicon Valley is full of startup solar companies that were 

funded to try to beat First Solar. That is literally the motto that 

some of them have. And that is really what I think our Country 

has been all about, is competition and innovation spurred by success and by market opportunities. It is a global marketplace and 

the hub of the activity and the innovation will always be in the 

United States. 

Mr. CUMMINGS. Mr. Woolard? 

91 

Mr. WOOLARD. In terms of innovation? 

Mr. CUMMINGS. Innovation, yes. And the value of innovation. See 

we are talking all this stuff here today, but the big picture is innovation and jobs, and how does the United States stay competitive. 

You know, we hear a lot of talk, but we don’t always walk the 

walk. And what I am saying to you is you are the guys who are 

like on the front line, like in the trenches, like having to make decisions, difficult decisions, putting your butts on the line every day. 

So I am just so glad that you are here and that you are the 

innovators. I just want to just get an idea. While we are talking 

all this stuff, the Chinese are running, just moving rapidly, and I 

just want to make sure we stay focused on what we need to stay 

focused on, and that is the United States being number one. I don’t 

want to be number two. I don’t want to be number three. We are 

better than that. And sometimes I think we get mired in stuff that 

distracts us, and then get mired in a culture of mediocrity and failure, and I think we need to be very careful with that. 

I think my time is up, unfortunately. 

Mr. JORDAN. Mr. Nelson, do you want to be number one? Do you 

want to have the best company you can possibly have? 

Mr. NELSON. Yes, sir. 

Mr. JORDAN. Okay, good. 

Mr. Woolard, just real quick. The email, the proofread email that 

you sent and you asked them to take a look at, and you said that 

you did not send that to the White House chief of staff, Mr. Daley? 

Mr. WOOLARD. Yes, sir. 

Mr. JORDAN. You know for certain, you clearly remember that 

you did not send that email? 

Mr. WOOLARD. I would not have sent it; I believe it would have 

been from John, and I don’t believe John—— 

Mr. JORDAN. Well, which is it, he didn’t send it or you don’t believe he sent it? 

Mr. WOOLARD. To the best of my knowledge, he did not send it. 

Mr. JORDAN. So you know that you didn’t send it, even though 

you are the one who asked for them to proofread it, and, to the best 

of your knowledge, you think Mr. Bryson, now Commerce Secretary, didn’t send it. 

Mr. WOOLARD. Yes, sir. 

Mr. JORDAN. Okay. Did you communicate with the White House 

in some other fashion? Did you send them another letter? Did you 

call them? Did you go to the White House and meet with them 

about this issue? 

Mr. WOOLARD. I have never met with Mr. Obama. 

Mr. JORDAN. Do you know if Mr. Bryson did while he was still 

CEO? Did he meet with, did he discuss this on a phone call? Did 

he or you discuss this on a phone call with the White House chief 

of staff? 

Mr. WOOLARD. I certainly never have and—— 

Mr. JORDAN. You did not? 

Mr. WOOLARD. I did not. 

Mr. JORDAN. And Mr. Bryson, to your knowledge? 

Mr. WOOLARD. To the best of my knowledge didn’t. 

Mr. JORDAN. Okay. Just wanted to be clear. 

The gentlelady from New York is recognized. 

92 

Ms. BUERKLE. Thank you, Mr. Chairman, and I apologize. Quite 

ironically, I have been chairing a subcommittee hearing for veteran 

affairs, making sure that the heroes of this Country who have 

served our Country in service and sacrifice are getting what they 

need, and our hearing today was on prosthetic devices. So I apologize for not being here for most of this morning’s hearing. 

I want to just talk for a few minutes here. A few weeks back, 

in March, Secretary Chu was here and talked to us about the loan 

guarantee program, and he praised the work that was being done 

by the Department of Energy. And three days after his appearance 

right in this very room the Secretary put out a memo, and the 

memo had to do with scientific integrity. And he stated in the 

memo, he laid out a very commendable framework for the Department of Energy and specifically he stated the Department’s mission 

relies on objective, reliable, accurate, and accessible scientific and 

technical information. The Department of Energy is committed to 

ensuring a culture of scientific integrity. And I think we can all 

agree that that is a very laudable goal. 

In November of 2011 the Department of Energy responded to a 

letter from Chairman Issa, and I believe he referenced that earlier 

while he was here, with an explanation of the Department of Energy’s awareness of the risks associated with Cadmium-Telluride. In 

that letter, as their source, they cited Professor Vasilis Fthenackis. 

Now, my understanding, and I am a nurse and I spent most of my 

professional career in healthcare, both with hospitals and as a 

nurse, my understanding is that cadmium is a highly toxic carcinogen and could pose serious public health risks if not handled 

properly. 

So, Mr. Ahearn, my question is for you, at least this first question is. Did you or First Solar, or anyone on First Solar’s behalf, 

ever pay Professor Fthenackis, or any organization with him or 

that he was affiliated with, for research related to Cadmium-Telluride? And that is just a yes or a no, sir. 

Mr. AHEARN. As you have phrased that question, I think the answer would be yes. 

Ms. BUERKLE. Thank you. Now, on the screen you are going to 

see a slide here from a First Solar PowerPoint presentation related 

to the company’s use of Cadmium-Telluride. The highlighted portion of the slide states that a risk for First Solar is its reliance solely on the research of Professor Fthenackis. So my question again 

to you, Mr. Ahearn, is did you or anyone on First Solar’s behalf influence or recommend specific lines of research by Professor 

Fthenackis in any fashion? And again that is just a yes or no. 

Mr. AHEARN. Well, the answer is no, but I think it is incomplete 

without further explanation, if you would allow me. 

Ms. BUERKLE. Sure. Go ahead. 

Mr. AHEARN. So Professor Fthenackis was employed by 

Brookhaven National Laboratory, which is charged by the Department of Energy with assessing the environmental health and safety 

aspects of all photovoltaic technologies. Before we invested, and 

even after, in First Solar, Brookhaven and the National Renewable 

Energy Lab conducted their own independent assessment of the 

use of cadmium. 

93 

At some point after that, Vasilis Fthenackis and Brookhaven associated with Columbia University and formed a life cycle study 

center, and we contributed money, I am just not sure the entity or 

how it was done, to the Columbia University Center, but not with 

influence on any of their specific programs or research. 

Ms. BUERKLE. Thank you. Perhaps you could comment, then, the 

risk here on this first slide: We are almost completely reliant on 

Vasilis, and that is Professor Fthenackis, and his team. So—go 

ahead. 

Mr. AHEARN. I think this might relate to the European activities. 

So in the U.S. the independent assessment and validation work 

around cadmium had been done by Brookhaven and NREL. In Europe, at one point, there had not been any comparable independent 

government agencies or work done to assess Cadmium-Telluride 

because it hadn’t been introduced to the market, so we wanted to 

broaden the scope of research and interest the relevant agencies in 

Europe in conducting these kinds of assessments on Cadmium-Telluride. So I believe that is what this is referring to. 

Ms. BUERKLE. Did you or anyone on First Solar’s behalf at any 

time request that this research undertaken by the professor be 

kept confidential or otherwise not disclosed? 

Mr. AHEARN. Not to my knowledge. 

Ms. BUERKLE. On the screen you are going to see another slide. 

And I see that I am running out of time here, so I will make this 

quick, Mr. Chairman. 

On the screen you are going to see another slide from the First 

Solar presentation, again related to a risk matrix, stating successful future studies establish Cadmium-Telluride photovoltaic desired 

outcomes. It sounds to me like you are trying to state goals for your 

company and you are trying to really compromise the objectivity of 

scientific reports, and that, of course, is of grave concern to us. 

Given this evidence and this slide, Mr. Ahearn, the Department of 

Energy’s dedication to relying on credible and objective information 

seems to have been compromised by your campaign and I just 

would ask whether you agree or disagree with that. 

Mr. AHEARN. I disagree with that. These look like they are dated 

back in 2006, and if you would permit me to explain, I think I can 

explain this. 

Mr. JORDAN. Quickly. 

Mr. AHEARN. Okay. So the issue we faced in Europe was what 

will competitors likely do relative to First Solar, because we had 

the lowest cost technology. And our area of vulnerability would 

have been around the use of cadmium. So I think these slides are 

going to how do you anticipate a competitive attack and how do you 

get the scientific community engaged properly to get Cadmium-Telluride recognized as a proper technology in Europe. So it was back 

in that earlier time frame. 

Ms. BUERKLE. Thank you. 

And I yield back my time. 

Mr. JORDAN. I want to thank the gentlelady. I know she has to 

run. I have run too. 

And I promised you guys we would be out by 12 and we are actually—I know this is hard to believe—we are going to be close. We 

have two left. Mr. Kelly has agreed to chair for the final two quesVerDate Aug 31 2005 14:13 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00097 Fmt 6633 Sfmt 6633 C:\DOCS\74453.TXT APRIL
94 

tions from our members. Mr. DesJarlais will go first, then Mr. 

Kelly will close out the hearing and get the final round. 

I want to thank all our witnesses for being here and for making 

the trip and the sacrifice it takes to come here and testify. We appreciate it. I think it has been a very good hearing. And as the 

chairman indicated, we plan to follow up with Mr. Chu and get 

some clarifications to his statements under oath back in March. 

But I want to thank our witnesses. 

With that, I will turn the chair over to Mr. Kelly, and Mr. 

DesJarlais is recognized. 

Mr. DESJARLAIS. Thank you, Mr. Chairman. 

In the spirit of trying to stay on time, I was listening to Mr. 

Cummings’, the Ranking Member’s, comments about the integrity 

of the panel sitting here, and really what we are here for today is 

to look into whether or not the taxpayer money was spent wisely 

in this area, in these investments. And I guess I might agree that 

it may not be any of your faults that these things didn’t go like you 

wanted, but I would question whether or not it is a failure in government, once again meddling probably where it doesn’t belong, 

trying to invest in the private sector when we have a shining example in Mr. Nelson of what the American spirit and free enterprise 

can do if you leave it alone, if the Federal Government would simply stay out of the way. 

For all the taxpayers sitting here watching today, I am sure that 

they are not very pleased with the way we, the Federal Government, invested their money in this case, and in many cases in business. So clearly maybe not shame on you, shame on us for not 

doing our homework better, loaning money in areas where clearly 

the risk was very high. And I guess I would wonder, for all you sitting there, if you had to invest all that money out of your own 

pocket, whether you would have taken the same path, and that is 

only a question you can answer. 

But this is the frustration we face here in the Federal Government and looking after the taxpayer money, trying to reduce this 

deficit and the spending problem that we have. We are asking right 

now, or a lot of people in Washington are asking to take more of 

the taxpayers’ money, and I would challenge whether anybody 

watching this hearing today would agree that the Federal Government needs another dime of taxpayer money until it can learn to 

manage it better than what we have seen in this hearing today. 

So that is just one man’s opinion, but I thank you all for joining 

us today and I yield back. 

Mr. KELLY. [Presiding.] Thank you, doctor. 

Mr. Woolard, some of the questions have been was there any political influence that was involved in these loans. Let me go to slide 

number 9. 

[Slide.] 

Mr. KELLY. This is from Manley Shafer from BrightSource to 

Doug Schultz at DOE Loan Program, and it says the team is at the 

White House, in the Vice President’s office at 10:00 tomorrow. So 

why at the White House and why at the VP meeting if it is not 

politically influenced? Why not just the DOE? 

Mr. WOOLARD. I believe—I am trying to make sure I have the 

dates accurate—this was in March—— 

95 

Mr. KELLY. It is March 8, 2011. 

Mr. WOOLARD. Yes. So we had—whenever we had correspondence on the Hill, we talked to the members of Senate about policy, 

we talked to Carol Browner sometimes, in the Administration, in 

the White House, about broader policy issues. 

Mr. KELLY. Okay. So you can see why—these are your own 

emails, so it comes up as, okay, there is no political influence being 

shown, we are not trying to go that way, but we are going to go 

to the White House, then we are going to meet with the Vice President, but this is really just a briefing just to keep them abreast of 

what is going on. 

Mr. WOOLARD. Well, we met with Lindsay Graham and others as 

well, and we met with—— 

Mr. KELLY. Well, I understand that. People come to my office everyday too. In fact, Mr. Ahearn’s people were in our office last 

week, very nice people, and their concern was the respect shown 

to you folks. And I know this is like getting a root canal without 

Novocaine. I understand that. But it comes down to this is taxpayer money, and because of what Mr. Mulvaney said—I am a 

General Motors dealer. General Motors has gone through more 

scrutiny than anybody, and I get told on the sales floor all the time 

I would never buy a guy from you guys again because you took the 

bailout. Well, actually, the dealership didn’t get it, it went to the 

corporation; the corporation is no longer the corporation; dada 

dada. But you go through all that stuff all the time. 

Mr. Ahearn, I looked at your resume and looked at your background. You are pretty astute when it comes to investing, there is 

no question about that. What happened at the end of the summer, 

in August of 2011, that all of a sudden the market started to drop, 

the shares for the company started to just go off the cliff? 

Mr. AHEARN. The core issue is that the subsidy programs that 

were creating the market for solar, which are, for the most part, 

in Europe, began to shrink pretty drastically as a function of the 

fiscal problems in Europe and a variety of dynamics, and that was 

coupled with a massive oversupply of Chinese panels coming on the 

market. So basically the market space started to dry up, and that 

really impacted all the industry stocks across the board. 

Mr. KELLY. So all of them were tumbling? 

Mr. AHEARN. They are all tumbling, yes. 

Mr. KELLY. And we look at Europe today and we look at—really, 

subsidies are driving—they just don’t have enough money to continue to fund what they have been funding. 

Mr. AHEARN. That is correct. 

Mr. KELLY. Okay. And the same thing really is pretty much 

going to happen here; we are running out of money to do the things 

that we think we should be doing, so you run out of capital and 

there is no infusion. 

Mr. AHEARN. That is right. And that is why I think I agree with 

your overall point that we have to be in markets that are not subsidy dependent, and I think we are fortunate we had some time 

and ability to lower our cost, but we need to move, now, strongly 

into markets that do not require these types of subsidies, which is 

what we are doing now. 

96 

Mr. KELLY. Okay. And the energy market—and I know. I am 

from Western Pennsylvania and I know what is going on in Western Pennsylvania. Around the rest of the Country, you look at all 

the fossils that are very much abundant and very much affordable 

and very accessible, so we are watching that go away. And I know 

that I probably would have gotten rid of my stock then too. Even 

though you had the loan guarantees coming in. You know, usually 

when you get the loan guarantees, it is like, okay, we have the 

money, we are going to be okay. But if you see the market kind 

of tanking, you say, you know what, it is time for me to get the 

heck out of here; I am going to take my marbles and run. So I understand why you did that. That is a smart investor. 

Mr. Nelson, one of the Administration’s top justifications for the 

1705 loan program was there just wasn’t enough private capital. So 

what do you guys know that nobody else knows? Why didn’t you 

go after that low hanging fruit that was out there with the government money? 

Mr. NELSON. Well, the bottom line is that I believe in the long 

run it is economics, not government policy, that is going to drive 

widespread adoption of green energy, and our whole point of view 

is to reduce the cost of green energy so it is affordable for people, 

and that is our approach. Ultimately, we change the economics and 

don’t rely on government funding. 

Right now we have plenty of private funding to do what we need 

to do and we anticipate that we will come up with a product that 

will actually be competitive and close to grid parity so it will be 

widely demanded, and that people that we want to do business 

with will accept us as a partner. 

Mr. KELLY. Okay. And, again, your background, Mr. Ahearn’s 

background, you folks are venture capitalists. You were with Bain 

for a while, so you understand a little bit about investing and turning companies around and making them good enough. 

Mr. NELSON. My wife would say just a little bit. 

Mr. KELLY. Just a little bit. Well, you know what? I am interested in that because, really, there is an old saying out there: if it 

not market ready, no amount of subsidy will affect it; and if it is 

market ready, it doesn’t need subsidize at all. 

Mr. NELSON. Well, that is the bottom line. We have talked a lot 

about innovation. Mr. Cummings talked articulately about innovation. The fact is that funding innovation is a really important part 

of the government’s function in this. But that is different than the 

loan guarantee program; that funds commercialization. And commercialization should be a private function and it should happen 

with good projects. When you have a project that isn’t economically 

viable or which costs substantially more than economic alternatives, no amount of government subsidy will ever bring that into 

widespread adoption. 

Mr. KELLY. Probably not a good investment. 

Mr. NELSON. That is my feeling. 

Mr. KELLY. Okay. I wonder, because I am looking at JPMorgan 

Chase and I see the DOJ is going to do an investigation because 

they had a $2 billion loss; $20 billion profit. And the people that 

we really come down on them is people who run $16 trillion in the 

red, that make investments everyday, that if the shareholders in 

97 

that company, which is the American taxpayers, they should be demanding also a look into what in the world are we doing with this 

money and where are we investing it, and at the end of the day 

what do we come up with. 

So I think we are done for the day. 

I want to thank you sincerely. And I know how difficult it is, but 

Mick made a good point: you can’t follow this trend and then be 

upset because people hold you responsible for it. I want you to understand I have deep respect for what you do. I have done—my 

own life has been very much through hard work and sweat equity 

and everything else, a lot of skin in the game. So I understand. I 

know it is difficult. But when that money is put out there and they 

dangle that carrot in front of you, sometimes it is a Judas goat that 

you probably shouldn’t follow because it really does come down 

hard on you. 

I appreciate your comments, Mr. Nelson. I read your background. 

I know exactly what works, what doesn’t work, and I do agree. This 

is science that sometimes is just way ahead of the market. It is not 

economically viable right now. There will be a time sometime in 

the future, but maybe right now is not the right time. We haven’t 

had a really positive ROI on it. 

So, with that, this hearing is now adjourned. 

[Whereupon, at 12:01 p.m., the subcommittee was adjourned.] 

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