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* State support needed, but risks further public fallout
* California faces rivals in China and other U.S. states
By Braden Reddall
FREMONT, Calif., Oct 26 (Reuters) - California political leaders chose a site near the headquarters of Solyndra to kick off hearings on how the state's growing cleantech industry can proceed in the wake of that solar company's dramatic collapse.
The U.S. solar industry is especially reeling now that its stand-out champion, First Solar Inc , just ousted its boss and warned on profits in the face of the same stiff Chinese competition that felled Solyndra.
Yet people who "had never supported cleantech" should not be allowed to use Solyndra against the sector and its backers, said Ellen Corbett, California's Senate majority leader, at the meeting of executives and investors in Fremont on Wednesday.
She was echoed by Bob Wieckowski, a state assembly member who said of the Solyndra bankruptcy filing last month: "I do not believe it should be seen as a referendum on government efforts" to promote clean energy.
There was, however, no escaping the ghost of Solyndra, which won a $535 million U.S. loan guarantee to build a now-dormant factory looming over a freeway not far from the hearing at the headquarters of solar module maker Solaria.
"I don't want to pick on Solyndra, but it's good to learn from the past," Solaria President Suvi Sharma said, arguing for support of firms that rely less on subsidies. "The last thing we want is more fallout from the public and the government.
But subsidies are an integral part of the game. Regulators and industry boosters at the hearing heard from an investor in one unidentified California solar company that was lured with a $250 million loan to set up a joint venture in China.
"Putting these packages together is how everyone else around the world is doing it," said Nancy Pfund, founding partner of DBL Investors, a San Francisco venture capital fund which manages $225 million and has backed firms including BrightSource and SolarCity, two California-based firms.
California remains a solar power leader, with IHS iSuppli estimating its installed solar capacity would be 1.2 gigawatts next year -- more than the next six states combined. The Golden State also accounts for a quarter of the 100,000 U.S. solar jobs, a number expected to rise by 24,000 next year.
But Pfund said it faces tough competition from other states such as Oregon and Mississippi, the latter having used subsidies to attract six cleantech firms in the past year.