As the campaign season kicks into full swing, we are going to take another look at the Clean-Energy loan program.
The DOE’s clean-energy loan initiative is still in the early stages, but it has been subjected to both positive and negative attention over the past few months, making it hard to determine what is truly going on with the program. While the news isn’t overwhelmingly positive, it certainly isn’t a complete disaster either
As a result of the project, which cost more than 15 billion dollars, a variety of clean energy initiatives are popping up across the country. This includes solar farms and wind turbines out west and an ethanol factory in Kansas that will take pieces of plants and transform them into renewable fuel. Clean energy is already being used to power a variety of products, such as solar lamp post lamps and it is sure to be utilized more and more in the future. These different initiatives, while working to reduce environmental debt, are also a small boon to the job market; a few thousand jobs have been added because of them.
Still, the loan program has had several missteps along the way, the most notable involving Solyndra. Solyndra received money to help support the development of solar panels but had difficulty competing with the Chinese in part because their products were so expensive. The business collapsed nearly a year ago and about a thousand people lost their jobs. In addition, Beacon Power was forced to file for bankruptcy and several other companies have needed to cut employees or implement unpaid leaves of absence for portions of their workforce.
For the most part, though, the various projects that have been given money from the loan program are still a work in progress. Many only received word that they would be receiving funds less than a year ago, so they are just beginning to get started with their initiatives. There does, however, seem to be a few similarities among the different recipients.
Although the program will create jobs, most of those positions will be phased out as construction on the different projects is completed. Some jobs will remain, however, even after the plants are fully functional, but the numbers won’t compare to what they were when the projects first began. In addition, not all of the projects under the clean-energy loan program are struggling; most of the issues are related to solar manufacturing. This is due, in part, because China can create solar panels that are so incredibly inexpensive that the United States just really can’t compete right now.
Essentially, it is too early to tell what the long-term effects of the program will be, although many people are speaking out about it, some with positive comments and others with negative opinions. For instance, Mitt Romney has been focusing his attention on the Solyndra failure; as a result of their collapse, he feels that the clean-energy program is simply a money pit that will eventually lead to more layoffs across the country. The Department of Energy, however, is proud of the successes that have come about as a result of both this loan and other grant programs; they feel that they are on the right track and want to continue to help the United States move toward further utilizing clean energy. President Obama is also a supporter.
Proponents of the program point to a several successful loan recipients to show the value of the project; these include Abengoa Bioenergy, Caithness Energy, U.S. Geothermal and NRG/First Solar. Abengoa Bioenergy was promised more than one hundred million dollars, and they are currently in the middle of building their ethanol plant in Kansas. Construction is on track, several hundred workers have been hired to handle the building phase and there will be more than 50 permanent positions once the plant is completed. Caithness Energy is also experiencing success, and they are a little further in the process than Abengoa Bioenergy. Securing more than one billion dollars from the government for a wind project, they are already producing power and approximately 1,000 people have found employment with them since the project began. The stories for U.S. Geothermal and NRG/First Solar are similarly positive.
However, detractors state that focusing solely on these successes keeps the public from seeing the big picture. And, it is true that some loan recipients have not been as lucky as those mentioned above. These include Abound Solar and the previously mentioned Beacon Power and Solyndra. In the case of Abound Solar, they were promised 400 million dollars from the DOE. Several months ago, they were forced to cut almost 300 employees at one of their plants, while another is basically just empty space. Beacon Power has fared no better. After they had to file for bankruptcy, they effectively transferred the responsibility for their loan to taxpayers; they could be responsible for more than 40 million dollars that the company was given to support the development of an energy storage facility in New York.
As for Solyndra, their goals seemed promising at the beginning; even the Obama administration was invested in the project. However, just after they told lawmakers that there was nothing to worry about with respect to the future of their company, they filed for bankruptcy. The FBI has been involved and many politicians point to the Solyndra situation as a failure on the part of the Obama administration.
Some situations are not as clear-cut as that of Abengoa Bioenergy or Solyndra. For example, Nevada Geothermal was promised nearly 100 million dollars. Although their project is producing power, they are creating less than they were several months ago due to an unexpected issue with a rock cluster that they are using to harness their power. The company believes they will be able to fix the problem, but some experts are not so sure.
It is hard to tell what the future holds for the clean-energy loan program. What is not in doubt, however, is that strong opinions will continue to be voiced by both supporters and opponents of the project.