Energy Department Revives Loan Program That Gave Money to Solyndra

A security guard walks around an empty parking lot of bankrupt Solyndra in Fremont, Calif., Friday, Sept. 16, 2011. The Obama administration was worried about the financial health of Solyndra, a troubled solar energy company, and the political fallout it could bring even as officials publicly declared the company in good shape, newly released emails show. An email from a White House budget official to a co-worker discussed the likely effect of a default by Solyndra Inc. on Obama's re-election campaign. Solyndra is also under investigation by the FBI. (AP Photo/Paul Sakuma)  
National Journal
Charles S. Clark, Government Executive
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Charles S. Clark, Government Executive
Sept. 20, 2013, 10:36 a.m.

En­ergy De­part­ment of­fi­cials an­nounced they’re giv­ing a new jolt to the con­tro­ver­sial loan guar­an­tee pro­gram that be­came a polit­ic­al foot­ball fol­low­ing the 2011 bank­ruptcy of one of its be­ne­fi­ciar­ies, the Solyn­dra sol­ar pan­el maker.

As one of an ar­ray of green ini­ti­at­ives un­der new Sec­ret­ary Ern­est Mon­iz, En­ergy is re­viv­ing the pro­gram — launched in 2005 but ex­pired since com­ing un­der at­tack by con­gres­sion­al Re­pub­lic­ans — with a broadened fo­cus to help the oil and gas in­dus­tries pro­du­cer clean­er en­ergy. As re­por­ted first by The New York Times, Peter Dav­id­son, ex­ec­ut­ive dir­ect­or of En­ergy’s loan de­part­ment, said, “We have a real prob­lem, and that’s ‘How do we get new tech­no­logy to mar­ket?’ We part­ner with in­dustry de­velopers and en­tre­pren­eurs to demon­strate a new tech­no­logy at the in­dus­tri­al scale or util­ity scale,” be­fore hand­ing the fund­ing over to private in­vestors, he said.

En­ergy is ear­mark­ing $8 bil­lion from $50 bil­lion in ap­pro­pri­ated funds it still con­trols. Of­fi­cials have em­phas­ized that the losses from the loan pro­gram amount to only 3 per­cent of the loan guar­an­tee port­fo­lio, but law­makers con­tin­ue their skep­ti­cism, cit­ing the $535 mil­lion Solyn­dra was giv­en and $168 mil­lion giv­en to the un­suc­cess­ful elec­tric car com­pany Fisker Auto­mot­ive, whose loan the de­part­ment auc­tioned this week.

“The Obama ad­min­is­tra­tion has got­ten in­to the busi­ness of pick­ing win­ners and losers at a sig­ni­fic­ant cost to tax­pay­ers,” said Sen. John Thune, R-S.D., in a state­ment call­ing for an end to En­ergy’s re­lated Ad­vanced Tech­no­logy Vehicles Man­u­fac­tur­ing loan pro­gram. “From Fisker and Vehicle Pro­duc­tion Group, to the Chinese-owned A123 [green bat­tery man­u­fac­turer], this ad­min­is­tra­tion should not be mak­ing ques­tion­able in­vest­ments with the Amer­ic­an people’s hard-earned money.”

Sen­ate En­ergy and Nat­ur­al Re­sources Com­mit­tee Re­pub­lic­an spokes­man Robert Dillon said, “there is not a de­mand nor a need for this pro­gram — the gov­ern­ment has gone out and sought com­pan­ies.” He re­ferred Gov­ern­ment Ex­ec­ut­ive to a re­port re­leased in Feb­ru­ary by the com­mit­tee’s rank­ing mem­ber, Sen. Lisa Murkowski, R-Alaska, that re­com­mends an end to some of the loan pro­grams and a broad­en­ing of an­oth­er to “al­low a wider range of vehicle tech­no­lo­gies and pro­jects to qual­i­fy.”

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