Former Energy Secretary Steven Chu told the San Francisco Chronicle in an interview that more green energy companies that got government-backed loan guarantees will go bankrupt.
“We’re going to have a few more bankruptcies,” Chu told the Chronicle when asked about the controversial Energy Department loan program. “Sometimes it’ll be like Solyndra where you get 3 cents on the dollar. Others, it’ll be 80 cents, or something like that.”
The Energy Department’s green loan program came under fire after the high-profile bankruptcy of the solar company Solyndra in August 2011. The company received a $535 million loan guarantee, and the DOE has yet to recover any of those funds.
However, Chu defended the loan program, saying it was more successful than Wall Street.
“If you look at what got started and what became bankable, was it successful? Yes. We were more successful than Wall Street. So come on, guys,” Chu said.
“This is not widely appreciated, but Congress, with the renewable energy loan program, and the advanced [vehicle] manufacturing [program], they appropriated enough for $10 billion in losses — $10 billion,” Chu said. “We’re not going to get to $10 billion. We might get to $2 billion. When Solyndra blew up, that was [a half billion]. You appropriate $10 billion, and you won’t even tolerate a half a billion?”
Solyndra was not the only green energy firm to go under. Beacon Power filed for bankruptcy in October 2011 after getting a $43 million loan guarantee from the DOE, as well as $29 million more from the federal government and the state of Pennsylvania.
Abound Solar also went bankrupt, drawing down on $70 million of a $400 million federal loan. The DOE cut the company off in September 2011 after the Solyndra scandal took off. Abound’s CEO blamed cheap Chinese solar panels for the company’s downfall, but a Daily Caller News Foundation investigation found that the company was selling a defective product that occasionally even caught fire.
“Our solar modules worked as long as you didn’t put them in the sun,” an internal source at Abound told TheDC News Foundation.
Sources also said that Abound knew its solar panels were faulty before it received taxpayer dollars, but kept pushing the faulty panels out the door to meet Department of Energy goals required for its $400 million loan guarantee.
More recently, the automakers Fisker Automotive and The Vehicle Production Group have been circling the drain and have stopped production.
Fisker makes the $103,000 Fisker Karma, a luxury hybrid and got a $192 million loan guarantee from the DOE. According to reports, Fisker lost $557,000 on each of the 2000 Karmas it has sold worldwide.
The Vehicle Production group recently announced it was stopping production of its natural gas-powered vehicle and laid off all its employees. VPG got a $50 million loan guarantee from the DOE.
The DOE also justified its loan programs by pointing to the job creation potential of green energy. However, critics have argued that the promise of green jobs has remained elusive and, not to mention, costly.
The Institute for Energy Research reported that each job created under the Section 1703 and 1705 loan programs cost taxpayers $11.25 million — only yielding 2,308 permanent jobs after spending nearly $26 billion.
House Republicans have also called into question the Energy Department’s green jobs claims under the Section 1705 loan program — the program that funded Solyndra.
“Unfortunately, based on Committee staff’s review of the redacted annual loan reviews for each project, it appears that these job estimates have failed to materialize, in part, due to the aforementioned bankruptcies and the precarious financial positions of certain other projects,” Republicans on the House Energy and Commerce Committee wrote to the Energy Department.
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