Well, it was only a matter of time before renewable energy hit the mainstream. By which we mean that the bloom comes off the road as the rubber hits the rose. 

Yesterday the FBI raided the headquarters of bankrupt Solyndra LLC, which formerly "led the way to a brighter future", to quote President Obama (4:00).  It seems that some questions have arisen over its bankruptcy filing and whether it misled the government in the procurement of loan guarantees. Those questions are the focus of a criminal investigation. What is the taxpayers' share?  Potentially over half a billion dollars.

Solyndra is not the only clean energy darling to fail. Evergreen Solar, Inc. has gone under.  As has Spectrawatt.  (We could add wind, biomass and others.)  A niche legal practice is building somewhere.

What practitioners should take from all this, and a central feature of our perspective, is that the new risks and opportunities in the climate change and renewable energy space, are ineluctably accompanied by the old risks and opportunities. The art and craft of what we as lawyers do is the melding of the old with the new.

To focus on solar, a key feature of a solar project is the renewable energy credit or REC. Lawyers on both sides should be focusing on where those will end up in a bankruptcy and who will have claims to them.  Is it just another asset, or do its features merit special consideration.  If a REC is an executory contract, perhaps the ostensible owner owns very little after a bankruptcy filing.  Another key feature, will be the tax credit. How will that be treated?  Who gets paid by the loan guarantee (such as in Solyndra's case)?

And we advise against just muddling through. We were on a wind farm deal where the other side proposed to include climate change (i.e., a change that would result in less wind) as a force majeure. A good idea, unless you understand how a force majeure clause works:  upon the occurrence of the force majeure event, one has to give notice in a specified period declaring the event.  Counsel obviously had never thought how the client would discern that climate change had occurred such that notice should be given. Because that moment cannot be precisely determined, inevitably such notice will be deemed late or premature and the defense to performance avoided.

We point all this out as a caution.  Contracts, like roses and like roads, need to be tended to.  A failure to understand the subject matter fully may result in something undesirable (like a mixing of metaphors), or even harmful (like the loss of a valuable asset).