Energy Innovation: If You Don’t Occasionally Fail, You’re Doing It Wrong

September 1, 2011

The solar manufacturer Solyndra– recipient of a $535 million loan guarantee from the Department of Energy– recently announced it is shutting its doors and declaring bankruptcy. Many will seize on this failure as evidence that the government shouldn’t be involved in supporting radical innovation. Yet this critique gets it exactly backwards: failure is a constant companion to innovation, and as such we should expect firms trying new things to occasionally fail. The most innovative firms in need of government support are those who are doing things or producing technologies that haven’t been tried commercially before. Whatever the merits of Solyndra as an investment– and there are suggestions it was, in fact, a mistake– failure in itself is not the enemy, so long as the investments are seeking to push the technology envelope and laying groundwork for future success.