It was the better mousetrap. From Silicon Valley to the White House, Solyndra’s unique solar panels left everyone gasping for a piece of the action.

Analysts gushed over the cylindrical design, so much more exciting than the dull flat panels coming out of China. Company executives promised huge revenue, supporting thousands of permanent jobs, while a stream of state and federal politicians toured the Fremont, Calif., plant, basking in what felt like the glow of the future.

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A security guard tries to block a photographer’s view of the Solyndra building in Fremont, Calif., earlier this month. The company’s cylindrical solar panels riveted investors, but sinking worldwide demand and competition from heavily subsidized Chinese flat-panel manufacturers pushed Solyndra into bankruptcy. The Associated Press

Investors, convinced that Solyndra was the big one, the harbinger of a solar boom, poured more than $1 billion into the company, with the U.S. government guaranteeing 50 percent more in loans.

Then suddenly the bottom dropped out. In a matter of days, Solyndra ceased operations, plunged into bankruptcy, was raided by the FBI and found itself thrust into a national political firestorm.

Nearly all the attention in the Solyndra case has revolved around the Obama administration’s $528 million bad bet, with partisan congressional finger-pointing growing increasingly nasty. But in many ways, Solyndra’s tale is one of irrational exuberance, a collective belief unswayed by blown sales projections, yanked IPOs, shuttered factories and fired executives.

Almost to the end, private investors continued to pump millions into the company. Officials in Sacramento, Calif., Madison, Wis., and other statehouses, thrilled to see jobs being created in a terrible economy, extended the public’s largesse, offering sales tax breaks and loan guarantees to Solyndra suppliers.

And when the balance sheet got really grim, everyone doubled down.

Whether corporate managers issued misleading financial information or covered up growing problems remains to be determined as federal authorities investigate the company, which fired its roughly 1,100 employees on the last day of August and filed for Chapter 11 protection Sept. 6.

But to grasp the saga of Solyndra’s rapid rise and even faster fall, one has to understand the dazzling appeal of its product. The company’s advancement in solar power was hailed as an invention so brilliant that it blinded everyone to the truth: Solyndra never had much of a chance in a fast-changing market.

“It was revolutionary,” said Walter Bailey, a former Macquarie Capital investment banker who specialized in green technology and visited Solyndra in 2008. “You had some of the smartest money in the world getting behind it. It was a real company with a huge factory and an extremely unique product.

“The only problem,” said Bailey, now a senior partner at boutique investment bank Focus Capital in New York, “was that it never penciled out.”

Unlike the increasingly ubiquitous flat solar panel, Solyndra’s design completely rethought the process of turning sunlight into electricity, creating a product perfect for flat roofs of warehouses, supermarkets and other commercial buildings.

Its rectangular panels, called modules, are made of dozens of horizontally arrayed cylindrical tubes — hence the name Solyndra. As the sun tracks across the sky, the curved surfaces stay perpendicular to its rays all day, unlike conventional flat panels. And light reflecting off the roof hits the underside of the tubes, increasing production.

Solyndra’s founder, Chris Gronet, invented the panels and left his job as an executive at Applied Materials Inc., a major supplier to high-tech companies such as IBM Corp., Samsung Electronics Co. and Texas Instruments Inc., to focus on solar full time.

He formed his own company in 2005 and lured investors with another selling point of his modules: the fact that they didn’t use silicon, an essential and expensive component of conventional solar cells.

“Very high-profile money was all over that company,” said Bailey, the investment banker. “Nobody else had anything as strikingly different as Solyndra.”

When the company emerged from what it called “stealth mode” in October 2008, it had already raised $600 million and was the toast of Silicon Valley. It also had applied for the Department of Energy loan guarantee, which would be granted in 2009.

By the time the loan was conditionally approved, sinking demand for solar energy had helped drive the price of silicon off a cliff, to less than $100 a pound. Heavily subsidized Chinese flat-panel makers began slashing prices faster than Solyndra could.

Solyndra’s prices were 66 percent higher than competing flat panels in late 2009, according to public documents filed with the Securities and Exchange Commission.

What’s more, Solyndra was selling them for almost half what they cost to make in an effort to build market share, which only led to mounting losses.

Damien LaVera, a spokesman for the Energy Department, argued that the government made a measured decision, one based on the tremendous potential of the Solyndra technology.

“Solyndra appeared to be well positioned to compete and succeed in the global marketplace,” said LaVera, whose agency ultimately turned down Solyndra for a second loan guarantee, worth $469 million.

He noted that revenue increased 40 percent, to $140 million last year from 2009, but acknowledged that the growth was far below prior company projections.

“The reason they went bankrupt is the changes in the solar market,” LaVera said.

Solyndra spokesman David Miller, who argued that the company had a chance for success until prices for flat solar panels fell even further this year, said at least two potential buyers had stepped forward.

If they don’t buy, however, the transformative concept of a cylindrical solar panel could die along with the company, analysts said.

That could leave a lot of projects in the lurch, including a 16.2-megawatt deal that Southern California Edison cut with Solyndra in mid-2010 to put its panels on 15 buildings throughout California. The project was to be Solyndra’s largest, yet nothing was installed by last spring’s deadline.

“I didn’t know that the end was coming” for Solyndra, said Marc Ulrich, vice president of renewable and alternative power at the utility. But then again, he said, he wasn’t too surprised to see yet another solar effort die.

“We know this market,” Ulrich said. “We always assume that about 40 percent of these projects will end in failure.”

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