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California lifts suspension of green energy tax credit

October 25, 2011 |  5:38 pm


Members of a state commission unanimously voted to lift a month-long suspension of an alternative energy-related tax credit that had been imposed following the bankruptcy of Solyndra, a politically connected California solar panel company.

The California Alternative Energy and Advanced Transportation Financing Authority, after reviewing its operations and the granting of $25.1 million in sales tax credits to Solyndra, concluded it could tighten the way it handles applications.

Joe DeAnda, a spokesman for the commission's chairman, state Treasurer Bill Lockyer, called the program "transparent and accountable." But he noted that "we can improve the way we evaluate applicants."

Solyndra, which used a $535-million federal loan guarantee to open a factory in Fremont, Calif., filed for bankruptcy protection Sept. 6. The announcement set off a political controversy in Washington, with allegations that the Obama administration pressured U.S. Department of Energy officials to approve the assistance despite warning signs that the company was in trouble.

California's support for Solyndra was much smaller than the federal government's. Solyndra was one of 26 companies that have participated in the California program.

State Sen. Alex Padilla (D-Pacoima), who held a hearing on the Solyndra case as chairman of the Energy, Utilities and Communications Committee, said he supported the state commission's decision to restart the tax credit. At last week's hearing, a number of executives from solar panel manufacturing companies praised the tax credit for making it possible for them to build and operate plants in California.

"The facts provided at the hearing show that the program is working as intended," said Padilla. "California-based green jobs are being created."

The state Legislature will act to improve oversight of the alternative energy tax credit, Padilla said, "but we must not let the failure of one company deter us."


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-- Marc Lifsher

Photo: Workers install solar panels at the Sacramento Municipal Utility District. Credit: Rich Pedroncelli/Associated Press