April 21, 2021

WE NEED MORE SOLYNDRA'S:

The Obscure Government Office That Launched Tesla Is Open for Business (Again) (Tina Casey, MAR 30, 2021, Triple Pundit)

The DOE is mainly known as a research organization, with 17 national laboratories and a vast, global network of academic institutions and private sector stakeholders under its belt.

Somewhat lesser known is the agency's role in providing financial assistance to help innovative energy technology cross the "Valley of Death" that separates promising work from the commercial market. When private sector dollars shy away from unproven technology, the DOE can step in with a financial and technical assist.

In support of that mission, the Loan Programs Office was created during the Bush administration through Title XVII, Section 1703 of the 2005 Energy Policy Act. It provides the DOE with broad authority to guarantee loans for innovative projects that serve critical needs, build markets, and create jobs.

As a funder of new technology, the LPO has failure built into its DNA. The program is designed as a balanced portfolio that allows wiggle room for the high risk that comes with high rewards.

On the failure side is the solar manufacturing firm Solyndra. The company was among the very first to apply for a loan in December 2007, just a few months after the loan office released its first round of solicitations. The loan was approved in 2009, under the Obama administration. Unfortunately, Solyndra's plans for opening a U.S. factory fell victim to global manufacturing forces and it went bankrupt in 2011. A 2015 DOE investigation also accused officials in the company of misleading the LPO on key points.

The LPO success stories that nobody talks about

When Solyndra went bankrupt, Republican members of Congress and their allies in the media seized the opportunity to slam the Obama administration's clean energy policies. With the "right wing noise machine" dialed up to an 11, Solyndra became a bleating, blaring symbol of failure and waste that persisted all through the Obama administration and continued into the Trump years.

Somewhat ironically, Republican members of Congress were initially eager to see the loan program in action. The DOE cites Republican U.S. Representatives Hastert, Burr, Barton and Simpson, who went on record in public hearings during the Bush administration in 2007 - and during the Obama administration in 2010 - to complain about the slow pace of loan approvals.

They should have kept cheering, as at least two of today's leading U.S. companies benefited enormously from the LPO.

One is Ford. The company famously refused assistance through the 2009 Recovery Act, but it did win a $5.9 billion loan from LPO that enabled it to upgrade 13 factories in six states.

The other, of course, is Elon Musk's Tesla Motors. Like Solyndra, Tesla was also among the first to benefit from LPO support. It earned a $465 million loan in 2010 on the strength of its electric vehicle (EV) technology. That would seem to be a high-risk proposition, considering GM's short-lived dip into the commercial EV field during the 1990s. Nevertheless, by 2013 Tesla repaid the loan in full. And by 2014, the company employed more workers than any other automaker in its home state of California.

Posted by at April 21, 2021 6:10 PM

  

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