FORTUNE -- It's no secret that Republicans view Solyndra as the corporate embodiment of everything that is wrong with the Obama administration. It received federal loans through a stimulus they opposed, its largest existing investor had ties to a major Obama fundraiser and the company's collapse cost taxpayers around half a billion dollars.
But last night Rep. Paul Ryan (R-WI) trotted out a new complaint: There were never any customers for the solutions Solyndra was trying to provide.
Here is what Ryan said last night in Tampa, as part of a speech accepting the GOP vice presidential nomination:
The first troubling sign came with the stimulus. It was President Obama’s first and best shot at fixing the economy, at a time when he got everything he wanted under one-party rule. It cost $831 billion – the largest one-time expenditure ever by our federal government. It went to companies like Solyndra, with their gold-plated connections, subsidized jobs, and make-believe markets.
For now, let's leave aside the cronyism argument (particularly since Congressional investigations into Solyndra have uncovered little more than it was a lousy investment). Instead, let's focus on the "make-believe markets."
The reality is that solar power installations here and elsewhere have been steadily climbing for years. For example, the Solar Energy Industries Association recently reported a 120% increase in PV installations during the first half of 2012 in the Americas. And very little of that includes the plethora of utility-scale projects currently underway, which really is where the solar market's future lies (as opposed to residential and commercial installations).
Department of Energy data isn't as current, but does show consistent increases in solar cell/module shipments and company formation through 2010: "Total shipments of PV modules in 2010 more than doubled compared to total module shipments in 2009, rising from nearly 1.2 peak gigawatts (GWdc1 peak) to more than 2.6 peak gigawatts... In 2010, there were 112 active PV manufacturers, importers and exporters that shipped PV cells and modules. This marks an increase of nearly 11% from the 101 companies doing business in 2009."
In other words, this is not a "make-believe market."
Solyndra did fail, but not because it believed in fictional customers. Instead, the two primary reasons were much more specific to Solyndra itself:
- 1. Solyndra's technology was very complicated, thus requiring a custom manufacturing facility. The result was an expensive product that was incrementally more efficient than that of many competitors, but not efficient enough to offset the price differential (particularly in the near-term). This was particularly problematic in Europe, where macro economic difficulties decreased demand for higher-priced products.
- 2. The Chinese government began aggressively subsidizing solar panels, thus exacerbating Solyndra’s pricing disadvantage all over the world.
It is obvious now that the U.S. Department of Energy made a huge mistake in giving Solyndra a $535 million loan guarantee. But that mistake was in not accurately assessing Solyndra’s ability to succeed in an increasingly-competitive market, not in believing that the market existed in the first place.
A presidential ticket running on its economic expertise should know the difference.
Sign up for Dan's daily email newsletter on deals and deal-makers: GetTermSheet.com