The fallout from the Solyndra bankruptcy has turned the entire US DOE loan guarantee program into a political food fight. The President is wisely silent on the issue, but his Republican rivals are like pigs at the trough over the headline grabbing incident in an effort both to tarnish President Obama as well as score points by being against Federal spending—a two-fer.
The US Department of Energy Loan Guarantee Program has issued $38.6 billion in loan guarantees and says those projects have created 63, 947 jobs. Let’s see that works out to $603,625 per job created or saved, as the saying goes. Where do you sign up for one of those jobs?
But underneath the 2012 presidential politics of this what are the real implications for the solar industry and the utilities that are depending upon it to deliver projects needed to meet their renewable portfolio standard targets on time?
- US DOE LOAN GUARANTEES ARE A SUPER-COMMITTEE BULLSEYE. The administration seems to realize that funding for the loan guarantee program has never been in more jeopardy. When the super-committee needs to cut $1.3 trillion in Federal spending it likely will target programs people don’t like and loan guarantees are tied to the same track as oil and gas subsidies with the train racing toward them.
- US DOE WILL RACE TO THE FINISH LINE ON LOAN GUARANTEES. Despite the prospects for funding cuts, DOE still believes in its venture capital role for the clean energy economy so it seems plausible that it will rush approval for as many projects as possible before the September 30, 2011 fiscal year-end deadline. Some estimates are that as many as 15-20 additional projects could be approved, but First Solar announced that its Topaz Solar Farm would not be among them as DOE says it cannot complete the due diligence and processing in time to meet the September 30th deadline. Two solar project loan guarantees were approved last week:
- $1.2 billion for Abengoa’s 250 MW concentrated solar power (CSP) Mojave Solar Project in San Bernardino County, California;
- $90.6 million for Cogentrix Energy’s 30 MW high concentration photovoltaic (HCPV) Alamosa Solar Generating Project.
The Solyndra crisis will be well worth it, if the consequence is to reduce the dependence of renewable energy on unsustainable subsidies, drive down the project costs and quicken the pace toward grid parity prices even if it requires a few big bankruptcies to strip out those cost to clear the market.
And then there is this—-we will try desperately to keep our big mouths shut and not break into a spontaneous chorus of Amazing Grace as the government gets hammered over its profligate spending habits and failed industrial policies of picking winners and losers hoping, against the audacity of hope, that the Solyndra controversy combined with the desperate need to cut spending drives a stake through the heart of such government intrusion into competitive markets—-and that will be the best customer benefit of all.
- First Solar Burned in Solyndra Fallout (blogs.wsj.com)
- Our Solyndra Epiphany (civicchoices.wordpress.com)
- Solyndra’s burnout burdens other solar upstarts (economicenergypolicy.wordpress.com)
- Waxman Says Energy and Commerce Dems Would Support GOP Subpoena of Solyndra Execs (nytimes.com)
- Parties Spar Over Loan Guarantees After Solyndra Fall (blogs.wsj.com)
- As Solyndra Execs Prepare to Take the Fifth, Company Blames DOE for Its Demise (nytimes.com)
- First Solar drops on loan guarantee speculation (marketwatch.com)