Bill Joy, founder of Sun Microsystems and partner at the venerable venture capital firm Kleiner Perkins Caulfield and Byers, is talking up a handful of companies he's invested in that make use of abundant materials—in some cases materials that get thrown away or burned up—to make valuable commodities and reduce carbon emissions and replace petroleum. He described the new companies today at the Emtech Conference in Cambridge, Massachusetts.

Solidia: The company, based on technology developed at Rutgers, is using carbon dioxide to make building materials that have the strength of concrete, but that rather than emitting one ton of carbon dioxide per ton of concrete, Joy says, it actually uses carbon dioxide as a building material.

Siluria: Natural gas is extremely abundant, but it's not useful for much other than burning it to generate electricity. Unlike oil, it isn't a good building block for drugs and plastics. And unlike oil, it's difficult to ship. To this day, some oil fields burn off the natural gas that comes up the well because there's no economic way to get it to market. Siluria is using directed evolution techniques developed at MIT to quickly sort through large numbers of potential catalysts for breaking down methane and forming building blocks that can be used to make ethylene, an important feedstock material, and eventually a range of chemicals and liquid fuels. The company says it's catalysts work well enough now to make liquid fuels at about $50 a barrel.

Renmatix: Cellulosic materials like wood chips are abundant, but turning them into sugar, which can be used to make ethanol and diesel—is expensive. Renmatix uses water at high temperatures and pressures to break cellulose down. The company says it will be cheaper because it doesn't require the enzymes or expensive catalysts used in current methods.

Aquion: The company is building cheap batteries to store power from wind turbines and solar panels, which could be key to making up for the variability of these electricity sources. The battery uses abundant materials—manganese, salt, water, and carbon—rather than potentially expensive metals like nickel.

The political hand-wringing and posturing over the bankruptcy of the California solar-cell maker Solyndra, which received a $535 million federal loan guarantee in 2009, is both predictable and misplaced.

It is not surprising that one of the many renewable-energy projects supported by loan-guarantee programs and the 2009 federal stimulus bill—which budgeted $45 billion for energy—would fail. The U.S. Department of Energy's loan guarantees program is designed to fund innovative, cutting-edge companies. Such companies are risky, and some inevitably fail, as any venture capitalist can tell you (hence the need for a federal guarantee in the first place). Even more predictable is that the downfall of Solyndra is being held up by politicians and some in the media as an excuse to question federal support for clean energy.

Witness yesterday's hearings held by the House Energy & Commerce Committee on "Solyndra and The DOE Loan Guarantee Program" and the ensuing mainstream media reports, including ones in the Wall Street Journal on "House Probes Solyndra Loan," the New York Times on "Furor Over Loans to Failed Firm," and Bloomberg Businessweek on how White House aides "pressured White House budget officials to complete a review" of the loan. Of course, it all comes down to a stream of endless e-mails. The smoking gun? Apparently, some in the White House were anxious for a decision on Solyndra. It is, some say, SolarGate.

Luckily, the Washington Post confidently assures us, despite the fishy nature of the Solyndra loan, the company's failure doesn't mean that federal support for energy R&D is a bad thing, or that solar is "doomed." And, according to the New York Times blog, "Solar Is Not Dead, Says Prominent Investor." Or as the blog somewhat snarkily adds, "at least that is what John Doerr" says. How silly can it get?

The backlash against federal support for energy projects fails to identify the fundamental policy mistake that produced the Solyndra debacle.

As we warned readers in these pages in June 2009, just months after the stimulus legislation passed, the real problem with the bill was that it conflated two objectives: creating jobs and building a clean-energy infrastructure. As we pointed out, both are very important and worthwhile, but they are very different and require very different policies.

By its nature, stimulus spending needs to be fast and immediate. The switch to clean energy will take decades of work and investment. The development of new energy sources will take patience and thoughtful investments. By conflating job creation with technology objectives, the stimulus bill made a Solyndra almost inevitable. Of course, decisions on funding were made in a hurry; spending the money quickly is the whole point of a stimulus bill. Unfortunately, evaluations of technologies do not lend themselves to rush jobs.

As Daron Acemoglu, an economist at MIT, warned our readers at the time about the stimulus package for energy projects:

"It's very much like pork-barrel politics," he says. As a result, it's hard to properly evaluate the different spending programs. And, he suggests, "when you make investments in bad projects under the name of stimulus and in the name of technological investments, you're doing damage in a number of ways. First of all, you're not helping; second, you're confusing matters; and third, you're poisoning the well for the future."

Elsewhere, the 2009 article points out:

Not only could the federal spending support uneconomical energy sources (as has been the case with ethanol), but the resulting backlash could discourage policy makers, investors, and the public from embracing newer, more efficient technologies. As the stimulus runs its course in two to three years, pressure to reduce the federal budget and cut government spending could make such a backlash even worse.

One renewable sector that could be particularly vulnerable in such a scenario is the solar industry.

The downfall of Solyndra does point to some fundamental mistakes made in conflating job creation and clean-tech development. But the lesson has nothing to do with the importance of federal support of energy innovation. That's as important as ever.

In the last several years costs for solar power have dropped significantly, driven by advances in manufacturing technology, improvements in efficiency, and government support, among other things. Apparently, that's led some solar power plant projects to switch from using solar thermal technology—which involves concentrating sunlight to generate high temperatures that can be used to generate electricity—for photovoltaics, solar panels that convert sunlight to electricity directly. At least that's what Reuters reported today.

Reading between the lines, the issue may also be something called bankability. Solar panels are established technology—banks have a pretty good idea how long they'll last and what the return on investment will be. Much of the solar thermal technology being deployed now hasn't been tested on a large scale for long periods of time, which can make financing harder. Indeed, in one case, "the company would have needed to secure loan guarantees from the U.S. Department of Energy aimed specifically at new technologies," the report said.

Photovoltaics may have another advantage over at least one solar thermal technology called"power tower". The technology requires arranging a field of mirrors around the tower. The placement of the mirrors is critical, and in some cases requires bulldozing a large area, which can destroy animal habitats. Concerns over desert tortoises are slowing some solar thermal projects in California. There's more flexibility with the siting of solar panels. From the article,

Solar Millenium spokesman Edward Sullivan said PV arrays can be slotted into the most appropriate areas.

"Our [solar thermal technology] is a little bit more restrictive," he said. "We have to develop 250 megawatt chunks, so that requires us to develop large continuous swaths, whereas PV is much more flexible."

But solar thermal stands a chance, especially in light of a series of DOE loan guarantees announced in recent weeks (the DOE keeps a list here). The DOE is also helping out photovoltaics. Yesterday it announced a multibillion dollar guarantee to support solar farms that will use panels from Tempe, Arizona-based First Solar.