Parading the Obama administration's commitment to green jobs and alternative energy, the U.S. Department of Energy (DOE) is backing nearly $40 billion in loans for risky ventures involving renewables. The department announced new projects days after the bankruptcy of solar panel maker Solyndra, the administration's one-time green energy poster child.
The latest projects, backed by federal loan guarantees (assuring creditors they'll be repaid if a project fails), also involve solar power. The government has hired SolarCity to work at 124 U.S. military bases over the next five years, installing solar panels on 160,000 housing units, warehouses, and administrative buildings. DOE is backing 80 percent of an initial $344 million loan for the massive, billion-dollar project, which will double the number of U.S. rooftop solar power systems. SolarCity CEO Lyndon Rive told a Bloomberg reporter that the government assurances were necessary to make the venture affordable.
Another $150 million loan guarantee went to 1366 Technologies, a company aiming to reduce the manufacturing cost of solar panel cells. Instead of cutting silicon wafers from a block, as is the industry practice, the company casts them from molten silicon. And in June DOE announced loan guarantees of $2 billion for two "concentrating solar power" plants, which use curved panels to collect light.
According to DOE, one of its goals is to support novel technologies such as these that are "not yet supported in the commercial marketplace"-that is, private investors aren't willing to shoulder the risk of financing them. Solyndra's failure illustrates why: The company made solar arrays using cylinders (rather than conventional flat panels) designed to collect light from any angle, but its production costs were high. Market forces and cheap solar panels from China kept Solyndra from being a profitable power option, even while $535 million in DOE loan guarantees kept the company afloat. The government agreed to restructure its guarantees to Solyndra earlier this year to keep private investors on board, but after DOE refused a second restructuring in August, Solyndra abruptly fired 1,100 employees and filed for bankruptcy with $784 million in debt.
Seven weeks earlier, in a letter to House energy committee members, Solyndra CEO Brian Harrison had said his company was expanding and revenues were increasing. Committee leaders and the FBI are now investigating. White House emails suggest the administration rushed DOE's approval of the Solyndra deal.
"Venture capitalists-with their own money at stake-have a better record of sorting these things out than do venture bureaucrats and venture politicians," wrote David Kreutzer of the Heritage Foundation.
The University of Michigan partnered with automakers in August to launch a trial of vehicle-to-vehicle communication, a next-generation safety technology. Relying on Wi-Fi and GPS, the system enables vehicles to send information to each other about their speed and position. The technology can potentially alert drivers to traffic jams and warn them if it is unsafe to pass or if a vehicle is approaching an intersection too quickly. Volunteers will try out the system for the next year, driving 3,000 cars fitted with wireless transmitters through the streets of Ann Arbor, Mich.