It was the biggest story of Obama-era cronyism, and one that nearly led to criminal charges. A politically-connected solar energy firm misled the feds to receive a loan guarantee worth upwards of a half-billion dollars, and two years later it was bankrupt. Every detail of the Solyndra saga was followed in the conservative media, and it was a big part of the Tea Party’s brief against government spending. More philosophical commentators made it into a libertarian fable about the dangers of the government picking winners and losers.

But what if that’s not the whole truth?

When Solyndra executives testified before Congress, they blamed the flood of cheap Chinese silicon-based photovoltaic solar panels, which rely on less expensive technology than the one the company had come up with.

While one should not excuse these executives for their mistakes —the DOE inspector general found that Solyndra misled government officials in the loan guarantee process—they are almost certainly right.

Solyndra received the loan guarantee as China was ramping up production both of finished silicon-based products and the raw materials that went into them (the drop in polysilicon prices is often cited as a death blow for Solyndra). The head of the DOE loan guarantee program testified in 2011 that China’s market share of solar panel production had grown from 6 percent to 54 percent since 2005.

To some extent this is a problem U.S. authorities should have seen coming; an antidumping duty on Chinese silicon metals has been imposed since 1991 and remained in place over several subsequent reviews. “China’s existing polycrystalline silicon production capacity was around 20,000 tons, with another 80,000 tons capacity under construction,” a State Council report said in 2009. “Yet annual production was only around 4,000 tons. The overcapacity was obvious.” Think about that for a moment: Chinese silicon producers were only operating at one-fifth of capacity, and yet they were quintupling that capacity. That’s not capitalism chasing demand, it’s industrial strategy, aimed at capturing high-tech manufacturing. It worked.

In terms of raw materials, from 2011-2013 China produced about a third of the world’s polysilicon, today it’s more than 60 percent. (As an aside, the largest polysilicon-producing region in the country is around the Tarim Basin, or Xinjiang, which is also the site of the worst human rights abuses by the CCP, including genocide of the Uyghurs.)

In 2018, China began cutting its solar subsidies, once they had pretty much cornered the market. In the same year, according to the International Energy Agency, China produced 93 percent of the world’s photovoltaic wafers, 74 percent of the world’s solar cells, and 73 percent of the world’s finished panels.

There was no way for a company like Solyndra to compete with this kind of production. In 2016, a Chinese photovoltaic company, Yingli Solar, settled an antitrust lawsuit by Solyndra for $7.5 million. That’s not an admission of guilt, but it does indicate that Chinese companies would rather simply pay than have some of these trade issues litigated in court.

Reviewing the Solyndra debacle nine years on, the thing that sticks out most is how inadequate both the Obama administration’s policies and the conservative critiques of them were to the moment.

It was indeed foolish of the Obama administration not to have taken some of these factors into consideration when undertaking what basically amounts to industrial policy. The green energy part of the 2009 Recovery Act was motivated by similar “both-and” logic as today’s green new deal, that it’s both a jobs program and an environmental measure. If the goal was to build up an American green energy sector, at a minimum it seems necessary to mitigate Chinese efforts to monopolize the market.

The traditional Hamiltonian method for building up domestic industry is a big, fat tariff; Trump imposed a 30 percent tariff on Chinese solar panels in 2018. Handing out a half-billion dollars to a company only to leave it exposed to being driven out of business in 24 months by a foreign adversary is at best short-sighted.

Yet what conservatives were saying at the time also seems equally mistaken in hindsight. Wasted taxpayer money is a good message for campaign ads, but beneath the story of Solyndra’s collapse, the ground was shifting, and China was able to take over tech manufacturing from the country that kicked off the computer revolution. For all conservatives’ veneration of markets they were remarkably uninterested in how markets like this one were operating to the detriment of both American businesses and the national interest.