OLYMPIA, Wash. (AP) — Jay Inslee once speculated that the solar company SunPower could be the Microsoft of its industry.
The Democrat candidate for governor invested a chunk of his own money in the firm, then publicly touted the company’s work making solar panels and championed policies in Congress that would aid the industry’s growth.
None of it helped fulfill Inslee’s prediction: SunPower stock — once as high as $133 a share — has sunk to under $5, and the company recently announced it was cutting jobs amid stagnant demand.
The case of SunPower illustrates the risk of Inslee’s core economic strategy, which is based in part on the development of what he touts as the clean energy economy. Other major aspects of Inslee’s platform — fully funding education and avoiding taxes, for example — are dependent on his economic proposals to stir job growth beyond what economists are projecting.
Inslee has said voters need to look at the green industry as a whole, not just the fate of individual companies. He’s noted that the clean tech sector grew twice as fast as the regular economy between 2003 and 2010. But that number doesn’t give the whole picture.
In a Brookings Institution analysis of the industry last year, researchers determined that the overall clean energy sector added jobs at an annual rate of 3.4 percent over that seven-year timeframe, and the figure lagged the national economy’s 4.2 percent annual growth. Inslee has chosen to focus on the growth in a small subset of that industry — newer clean tech firms — that account for less than 10 percent of total jobs in the industry.
The Brookings report released last year estimated that Washington state had about 84,000 overall green industry jobs in 2010, with large chunks of those in areas such as public transit, organic farming and hydropower. About 300,000 people in the state are currently unemployed.
Devashree Saha, a senior policy analyst at Brookings, said there is major long-term potential in clean technology jobs and that it’s important for governments to be investing in them now for benefits in the coming years. But she said the Democratic pitch that the industry would help pull the country out of the recession in the short-term hasn’t been realistic.
Saha also noted that cheap solar panels from China have recently forced some U.S. manufacturers out of the market, and the industry could face trouble if Congress doesn’t renew some tax subsidies that are currently maintaining the sector’s momentum.
A loss of those incentives would create a lot of turmoil, Saha said. She said some companies are already prepared for layoffs if that occurs.
Inslee said in an interview with The Associated Press that he did not remember buying stock in SunPower back in 2006, even though it is one of the few individual stocks he recently listed as owning. He had more than $15,000 invested with the company in 2007, according to financial disclosure reports, and he reported holding stock in the company valued between $4,000 and $20,000 last year.
Along with various investment funds, Inslee’s latest financial report shows stock ownership in only handful of companies, each with headquarters or a strong presence in Puget Sound — Amazon.com, Costco, Starbucks, Zumiez and Advanced Micro Devices.
The only other stock he listed is SunPower, which is based in California and doesn’t appear to have any office in Washington state. Inslee said he didn’t know why he purchased the stock.
“I can’t recall the reason,” Inslee said. “How did it turn out? I don’t know.”
It’s clear, though, that Inslee knows something about SunPower. In a 2007 book, Inslee lavished praise on the company, its growth and its future prospects. He and a co-author wondered in the book whether SunPower could be the Microsoft of solar energy.
“The firm produces one-hundred megawatts of power a year, with $680 million cash on hand, and is listed as the blue chip stock in the solar company field, one that Wall Street analysts feel has to be in any renewable energy portfolio,” they wrote then.
Inslee went on to be a leader in championing the clean energy cause in Congress, pushing tax incentives, support for research, feed-in tariffs, national net-metering standards and use of vehicles that are less gas-dependent. He co-founded and co-chaired the House Sustainable Energy and Environment Coalition.
Inslee, who resigned from his congressional seat this year to focus on his campaign for governor, said he’s proud of the work he did to spur the industry and said he didn’t see any conflict in pushing laws to help a sector in which he had a financial stake.
“The only perfect way to avoid any conflict ever is to be penniless,” Inslee said.
Craig Holman, who lobbies on government ethics matters for the national watchdog group Public Citizen, disagreed with Inslee.
“That is a conflict of interest and a cause for concern,” Holman said of the investment. “Members of Congress should make every effort to avoid those conflicts of interest.”
Holman said lawmakers should recuse themselves from taking official actions that would benefit a company in which they have a financial stake. Or, he said, politicians could simply avoid holding those stocks.
Inslee’s current economic plan continues to focus on clean energy, and he says Washington state will lead a revolution in that area just like the state did in aerospace and computers. He also has proposed policies to encourage growth in other sectors, such as a tax break for small business hiring and business tax relief for small research firms such as those in life sciences and clean energy.
Inslee says his economic plan will drive strong growth, allowing him to add money for education and balance the state budget without taxes.
Even with the recovering economy projected to add 7 percent to the state’s revenues in the next biennium, state forecasters say Washington will need to find an additional $1 billion to properly balance the budget and another $1 billion to fund education in response to a state Supreme Court ruling.