Another solar energy company goes under
Like Solyndra, Solar Trust had received a federal loan guarantee, at $2.1 billion one of the largest ever given by the Department of Energy.
But Monday’s bankruptcy filing did not mean a default because Solar Trust lost the guarantee when the project was put on hold in August for a change in technology from solar thermal to photovoltaic.
UPDATE #2 (P.M.): Powerline: A Narrow Escape For Taxpayers:
Barack Obama’s Department of Energy offered the company a $2.1 billion loan guarantee just last year. Fortunately, Solar Trust turned it down….the Obama administration’s proposed loan guarantee was so dumb that the prospective borrower decided not to take it! That tells you all you need to know about the Obama administration’s ability–actually, the ability of any administration–to execute an industrial policy that doesn’t fleece the taxpayers.
Original story, as posted in the A.M.:
The ongoing scandal that is the Department of Energy’s loan guarantee program continued to unravel today with the bankruptcy of Solar Trust for America. Less than a year ago, Energy Secretary Steven Chu crowded about awarding the biggest loan guarantee for any solar power project. On April 18, 2011, Chu posted the “good news” on the White House blog:
I have good news. Today, the Department of Energy offered a $2.1 billion conditional commitment loan guarantee to support a concentrating solar thermal power plant near Blythe, California. This is the largest amount ever offered to a solar project through our the Department’s Loan Programs Office.
Chu said the project would generate 1,000 megawatts of electricity and create 1,000 jobs. Interior Secretary Ken Salazar attended the groundbreaking ceremony, describing it movingly as a “a historic moment in America’s new energy frontier.” Yesterday, Solar Trust declared bankruptcy. It’s not clear yet how much of the $2.1 billion the taxpayer is on the hook for, but Solar Trust joins a growing list of public and embarrassing failures for the administration’s clean energy agenda.
First there was Solyndra, a solar panel manufacturer which received a $535 million federally guaranteed loan. President Obama bragged about creating 1,000 jobs there in his 2010 State of the Union address, even as Solyndra was collapsing. It declared bankruptcy the following September and left the taxpayers holding the tab for its outstanding debt.
Barely a month after Solyndra went under, another company subsidized by DOE declared bankruptcy. Beacon Power received a $43 million loan guarantee in August of 2010, and despite receiving $29 million in other grants from Pennsylvania and the feds, filed for Chapter 11 a little over a year later.
In January, the president, undeterred, again used his State of the Union to gloat about a brilliant alternative energy “investment.” He stated that thanks to his “partnership with the private sector” he has “positioned America to be the world’s leading manufacturer of high-tech batteries,” referring to a $118 million stimulus grant awarded to EnerDel, a subsidiary of Ener1. Less than two days after his speech, Ener1 declared bankruptcy.
Then there was the recent incident involving First Solar, a heavily subsidized firm that got $16 million from the Obama administration to expand its facility in Ohio. In September of last year, First Solar got over $450 million in guaranteed loans from the Export-Import Bank to sell solar panels to two power plants in Canada. Interestingly enough, First Solar owned the plants “buying” the solar panels, essentially receiving taxpayer subsidies to sell solar panels to itself.
At least 40 companies have received government backing from the Department of Energy’s loan guarantee program, for a grand total of $30 billion in taxpayer liability. A Government Accountability Office audit revealed many serious problems with the way DOE processed the loans, including violating its own procedures for evaluating applicants’ risk of default. Because of shoddy documentation and poor record keeping, in some cases the GAO could not even determine what the DOE had done, or why.