Federal Renewable Innovation Spending Pays Off Big. Go Figure.

November 13, 2014

The Federal Renewable Energy loans, so hated by the fossil fuel lobby – are making money for taxpayers.
The Taxpayers win. The Planet wins. Our Children Win.
Clean energy haters in Congress failed to return calls for comment.

Reuters:

The controversial government program that funded failed solar company Solyndra, and became a lighting rod in the 2012 presidential election, is officially in the black.

According to a report by the Department of Energy, interest payments to the government from projects funded by the Loan Programs Office were $810 million as of September – higher than the $780 million in losses from loans it sustained from startups including Fisker Automotive, Abound Solar and Solyndra, which went bankrupt after receiving large government loans intended to help them bring their advanced green technologies to market.

Still, the federal loans program is a success for taxpayers, judging by the numbers in the new report, the DOE said. After Solyndra’s 2011 collapse, the program was sharply criticized by Republican lawmakers as a waste of public money and a fountain of cronyism. The outcries mounted as others in the program failed, and the DOE issued no new loans between late 2011 and this year.

International Business Times:

The U.S. Department of Energy’s controversial loan program for risky and innovative companies — including the now-defunct solar firm Solyndra LLC and Tesla Motors Inc. — has officially wiped out its losses. On top of that, the federal agency says it now expects to earn more than $5 billion from the program, according to a new report.

The results offer a sense of vindication to the Obama administration and the program’s backers. During the 2012 presidential elections, Republicans seized on the failure of Solyndra and a handful of other clean-energy firms as examples of wild misspending and “crony capitalism” during President Barack Obama’s first administration. Energy officials maintained that the program, which began under the George W. Bush administration, was critical for advancing the types of cutting-edge technologies necessary for reducing greenhouse gas emissions and fighting climate change.

Projects funded by the Loan Programs Office made $810 million in interest payments in September, according to the report released Wednesday. That’s higher than the $780 million in losses from loans it sustained when startups including electric-car maker Fisker Automotive, panel manufacturer Abound Solar and Solyndra went bankrupt after taking large government loans.

“Taxpayers are not only benefiting from some of the world’s most innovative energy projects… but these projects are making good on their loan repayments,” Peter Davidson, executive director of the Loan Programs Office, told Reuters. “Every month money continues to roll in” from interest payments, he said, and losses aren’t expected to rise significantly.

“We feel very confident that going forward our portfolio is much less risky than it has been,” he told Reuters.

Department of Energy:

At the Department of Energy’s Loan Programs Office (LPO), each project in our portfolio that comes online is an important achievement in our all-of-the-above energy strategy. In the five years since it issued its first conditional commitment, LPO has helped launch the utility-scale photovoltaic (PV) solar industry, deploy the next generation of concentrating solar power, revitalize the U.S. nuclear industry, commercialize cellulosic biofuels, and accelerate the growth of advanced and electric vehicle manufacturing.

We think those results show that LPO is succeeding in its mission to help finance the first commercial deployments of innovative technologies in the U.S. In addition to working toward our mission, we take our responsibility to protect taxpayer interests very seriously.

The best perspective for assessing LPO’s financial performance is to look at the portfolio in its entirety. And, as a whole, the portfolio is performing very well.

As of September 2014, 20 projects supported by LPO are operational and generating revenue. These projects are now repaying their loans to the U.S. Treasury, which issued the loans guaranteed by the Department through the Federal Financing Bank. Already, $3.5 billion in loan principal has been repaid on these long-term loans, which have an average tenor of 22 years. In addition, more than $810 million in interest payments have already been earned. For loans that have been disbursed to date, we expect to earn more than $5 billion in total interest payments over the full term of the loans — all of which goes back to the benefit of taxpayers.

 

Business Week:

The results contradict the widely held view that the U.S. has wasted taxpayer money funding failures including Solyndra, which closed its doors in 2011 after receiving $528 million in government backing. That adds to Obama’s credibility as he seeks to make climate change a bigger priority after announcing a historic emissions deal with China.

A $5 billion return to taxpayers exceeds the returns from many venture capital and private equity investments in clean energy, said Michael Morosi, an analyst at Jetstream Capital LLC, which invests in renewable energy.

NPR:

Overall, the agency has loaned $34.2 billion to a variety of businesses, under a program designed to speed up development of clean-energy technology. Companies have defaulted on $780 million of that — a loss rate of 2.28 percent. The agency also has collected $810 million in interest payments, putting the program $30 million in the black.

When Congress created the loan program under the Energy Policy Act of 2005, it was never designed to be a moneymaker. In fact, Congress imagined there would be losses and set aside $10 billion to cover them.

Still, when the Solyndra case emerged, Republicans on Capitol Hill had pointed criticism for the Obama administration. Rep. Steve Scalise, R-La., called the Solyndra case “disgusting,” and Sen. Lisa Murkowski, R-Alaska, labeled it “a colossal failure.” The conservative group Americans for Prosperity produced a television ad accusing President Obama of paying back campaign contributors.

There was an FBI raid on Solyndra’s headquarters and an investigation but, so far, no prosecutions. Now that the loan program is turning a profit, those critics are silent. They either declined or ignored NPR’s requests for comment. And with that, Energy Secretary Ernest Moniz wants to change people’s perception of his agency’s loan program.

24 Responses to “Federal Renewable Innovation Spending Pays Off Big. Go Figure.”

  1. andrewfez Says:

    Darn, I came here to post the selfsame news. Beat me to it….

    http://www.npr.org/2014/11/13/363572151/after-solyndra-loss-u-s-energy-loan-program-turning-a-profit

    Maybe a follow up with the Australian Clean Energy Finance Corporation being shut down by Abbot even though it was allegedly making a 7% profit?:

    http://en.wikipedia.org/wiki/Clean_Energy_Finance_Corporation

    • dumboldguy Says:

      That doesn’t meant the deniers won’t still be chanting “Solyndra” into the ears of the ignorant while they’re sleeping. That will be on the Repugnant Wrecking Crew’s play list along with Benghazi, Fast and Furious, IRS, War Against Coal, and that all-time favorite “CO2 is Good for the Planet” by that famous crock music group The Idso Brothers and Heartland.

      And a 7% profit is peanuts in the world of Australian fossil fuels. Somewhere in the writings about how declining prices were going to force Australian coal out of business I read something to the effect that it cost them only $200 to mine and ship a quantity of coal that they charged $800 for, and that it would therefore be a long time before prices dropped to the point that coal wouldn’t be profitable. That’s why it they invest in building coal exporting facilities rather than “clean energy finance”.

  2. omnologos Says:

    “The DOE issued no new loans between late 2011 and this year”

    Presumably those missing loans would’ve accounted for more than $30 million.

    • dumboldguy Says:

      More Omnologic expressed in Omnospeak and causing more Omnoconfusion. A loan that is not made is not “missing”, it simply was not made and never existed. You were trying to make some pointless point here?

      • omnologos Says:

        If the loans help progress a period without loans is a period of hindered progress. Or more likely it’s a pause in loans so that the system might show some fictitious financial viability at some point.

        • dumboldguy Says:

          “If the loans help progress a period without loans is a period of hindered progress”? Let’s see—-is that the same as saying “If breathing helps sustain life, a period without breathing is a period of ‘hindered’ life (as in death)?”

          Yep, just more Omnologic expressed in Omnospeak and causing more Omnoconfusion. Omno should stop using his limited cognitive abilities attempting to be the resident Crock contrarian and save them for things like tying his shoelaces, walking without falling down. and eating food with knife, fork, and spoon.

        • dumboldguy Says:

          PS It’s 2 PM in the UK. Shouldn’t Omno be at work rather than posting inane comments on Crock?

  3. omnologos Says:

    Can’t imagine itcould be any clearerl

    The Federal Renewable Energy loans, so hated by the fossil fuel lobby – have stopped making new money for taxpayers.

    For three years.

    The Taxpayers have stopped winning. The Planet has stopped winning. Our Children have stopped winning.

    What’s the point of a loan system that has stopped providing loans?

    • jpcowdrey Says:

      Clearly, those loans will continue making money until they are paid off. The companies that borrowed that money will be making taxable profits, creating new jobs and providing more and more renewable energy with greater and greater energy conservation for years to come.

      I can’t imagine it could be any more clear.

      It is a shame that the Republican Congress is too stupid and short-sighted not to re-finance such a clearly profitable and socially responsible program.

      • jpcowdrey Says:

        Also, the Federal program was initiated at a time when it was difficult for any company, much less a renewable energy start-up to procure private financing.

        In the last three years, not so much. Not many government programs are so successful as to, in a few years, eliminate the need for the program.

        • omnologos Says:

          Recap

          According to themselves, without any independent audit

          They’ve thrown away a lot of money up to 2011

          in 2012 and 2013, despite giving away zero they were still in the red

          in 2014 at last they got even, or $30 million above zero. One could have expected it, as the early crashers have died and therefore only the viable companies are on. Plus of course they had zero outflow for three years. Had they kept financing as before, they’d still be way negative.

          Somehow magically this will turn into billions of dollars

          Funny isn’t it, whenever there’s climate change portentous things are always ’round the corner

          • dumboldguy Says:

            Is there a point or a cogent thought in there somewhere? If anyone sees one, please tell us, otherwise we’ll have to label this just more of Omno’s mindless “contrarianism”.

          • omnologos Says:

            Dumbold – you and the guys here are the only people finding excitement in a halted program devoid of any initiative for three years – a period during which all renewables technologies have progressed considerably. A programme that would’ve been far in the red had it tried to do what it was supposed to be doing, by keeping up with that progress. What can I say, if you’re happy to be fooled like that, so be it.

          • dumboldguy Says:

            Yep, Omno is running his mouth about things he doesn’t understand and hasn’t studied—-just being a mindless contrarian—-good old Omno—-he never lets us down when we need a useful idiot.

          • omnologos Says:

            Funny how I keep trying to get back to the figures but you’re stuck into this pop remote psychology mode writing inanities about strangers.

            Let’s try again.

            Had the funding actually funded new ideas after 2011, would it have been in the black in 2014? Only if it’d have funded less than $30M in 3 years, an amount too ridiculous to mention wrt renewables.

            Therefore the only thing to record is that if you stop funding new stuff after a while, you can get money back from the survivors. But that’s not the goal of a scheme designed to help new technologies for renewable energy.

          • jpcowdrey Says:

            maurizio, you are disingenuously making shit up, with zero understanding of how investments work. It isn’t magic, it’s interest.

            If loans had been made since 2011, those loans made pre-2011 would still be in the black, and those loans made post-2011 would most likely be in the black in a few years.

            There are loans still in the pipeline. The program hasn’t ended.

          • omnologos Says:

            Jp – “the DOE issued no loans between late 2011 and this year”

            There are no new projects and lines of income in the pipeline.

            Just take the 2011 new loans, apply same sum for 2012, 2013 and 2014 and see how much in the red the programme would be by now had it continued to do what it was supposed to be doing: “help finance the first commercial deployments of innovative technologies in the U.S.”

            No such help for three years. How can that be a thing to celebrate?

          • Jason Says:

            Jason only wonders how long Omno thinks a portfolio of investments in new start up projects should take to become profitable…

          • dumboldguy Says:

            Omno doesn’t understand what’s under discussion here and he doesn’t care. He is merely seeking attention (as usual) by making ill-thought out and ignorant comments. And we are feeding his need to be noticed. Are we helping him by doing so?


  4. Can this be the reason no new loans have been issued post 2011?

    ELIGIBILITY
    In order to be eligible for a section 1705 loan, the applicant must be a renewable energy systems project, an electric power transmission systems project, or a leading edge biofuels project. The applicant must also:

    Be located in the U.S.;
    Have begun construction on or before September 30, 2011
    Meet Davis Bacon requirements; and
    Meet all applicable requirements of the Recovery Act.

    http://energy.gov/lpo/services/section-1705-loan-program

    • dumboldguy Says:

      Omno the village idiot is once again not thinking any “clearer”. He persists in seeking attention by running his mouth in ignorance about things he doesn’t understand. Obviously, having the imagination to look things up and get some facts is beyond his capabilities.

      Arcus DID do some looking, and is on the right track. Section 1705 of the LGP has expired, and that’s the one that included Solyndra—no more loans to be made there. There is still quite a bit of money available for loan under section 1703 and the ATVM parts of the LGP, and the DOE is looking for borrowers.

      Some defaults are expected (and WERE allowed for when the program, was set up), but the taxpayers ARE coming out ahead, as this post “couldn’t make any clearer”. Here’s a source for anyone who wants more details on the loan programs.

      Click to access 663707.pdf

      PS In case anyone hasn’t noticed, the amounts of $$$ under discussion are chicken feed compared to fossil fuel subsidies over the years or what we spent in Iraq and Afghanistan (where we are now scrapping and destroying much of what we took over there as we prepare to pull out).

      PPS While we’re here, let’s grade Omno’s “test paper”

      Can’t imagine it could be any clearer. (WRONG)
      The Federal Renewable Energy loans, so hated by the fossil fuel lobby – have stopped making new money for taxpayers. (WRONG)
      For three years. (WRONG)
      The Taxpayers have stopped winning. The Planet has stopped winning. Our Children have stopped winning. (WRONG-WRONG-WRONG)
      What’s the point of a loan system that has stopped providing loans? (WRONG)

      Omno is 0 for 7—–can’t be a bigger failure than that. Maybe he’d score higher if he dealt in facts rather than BS opinions?

  5. omnologos Says:

    My other question: if the DOE provides no new loans, how exactly is its strategy any different with Obama than with a Republican administration?

    There’s zero about asking for attention in these questions. I’m not even American 8)

    What I’m interested is figure out why any government rubbish gets celebrated instead of being carefully scrutinised for the inevitable lies in it.


  6. […] investment, which pays real dividends. This is amply demonstrated south of the border, where such federal programs have been shown to pay big dividends, showing criticisms to be groundless. As a result, renewables are now outcompeting new fossil fuel […]


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