Despite what critics say, the DoE’s guaranteed loan program is a successful program and government investment to further develop clean energy is the right thing to do.
Let’s start by definitively debunking the Solyndra critique: The company's loans process began under the Bush Administration, it raised $1 billion dollars in private capital, and was named the topcleantech company in 2010 by the Wall Street Journal. Yes, it defaulted and went bankrupt, but the default rate for the entire loan portfolio is less than four percent. By comparison, the default rate for the popular Small Business Administration loan program is three times as high. Solyndra’s failure is not representative of the industry or government investment.
And, the idea that government shouldn’t be in the business of “picking winners and losers” is both misguided and disingenuous. Our current energy policy “picks” fossil fuels. Among the many tax breaks and incentives provided to the oil and gas industry, the Energy Policy Act of 2005 allows for reduced royalty payments and royalty-in-kind payments, instead of cash royalties, which leaves uncertainty as to whether fair payment is received. The royalty waiver program is estimated to cost billions of dollars in lost revenue over the life of the leases.