Independent Report Confirms: Energy Loan Program Successful, Cost Effective
This past Friday afternoon, an important new report, an “Independent Consultant’s Review with Respect to the Department of Energy Loan and Loan Guarantee Portfolio,” was released by the White House.
The report’s lead author is Herb Allison, who has “wide-ranging experience in the finance, business, and government sectors during a career in public and private service that spans four decades and both Republican and Democratic Administrations.” Included in those bipartisan credentials are Allison’s service as McCain’s national finance chair in 2000, as well as in the George W. Bush Treasury Department under Hank Paulson. The point is, this report is clearly not politically motivated or slanted. To the contrary, it’s a serious, authoritative look at an important program in support of clean energy, and should be read carefully by anyone who cares about the subject material.
So, what were the key findings of this report? The Center for American Progress has an excellent summary:
Allison and his team found that, despite the hysteria around the now-bankrupt solar-panel maker Solyndra LLC, this program will cost $2 billion less than initially expected. When the Department of Energy first issued these guarantees starting in 2009, they expected that they would cost the government more than $5 billion. At their most recent internal analysis in 2011, DOE concluded that the loans were performing better than expected, and that they would not cost less than $3 billion. Now, Allison and his team of independent consultants find that even DOE’s most recent projections were too high, and that the guarantees would only cost $2.7 billion.
To put that in perspective, the fossil-fuel industry got a whopping $70 billion in government subsidies from 2002 to 2008. Many of these subsidies have been in place for nearly 100 years…
And, the Center for American Progress adds, the Allison report “confirms what we already know, thanks to the Congressional Research Service and Bloomberg Government,” that “Federal loan guarantees for energy projects have been successful, cost-effective investments.”
In addition, as the White House points out, “loan programs are generating $40 billion in private investment in America’s economy that is supporting 60,000 direct jobs and thousands more up and down the supply chain.” And, the White House adds, “[w]ith the help of this program, American workers will build wind, solar, geothermal and nuclear power plants across the country that will help power our economy for decades to come.”
The bottom line is this: despite unfounded criticism, the DOE loan guarantee program actually has been a major success story. It also has been a bipartisan success story — signed into law by President Bush and effectively implemented by the Obama administration.
What’s most striking isn’t that the program has been a success, but that we’ve heard so little of that in the media. There, instead, we’ve gotten a heavy does of “Solyndra hype” and other sensationalism, emphasizing the political angle, even trying to turn the isolated case of Solyndra into some sort of broad scandal that somehow tarnishes the entire solar industry.
To the stark contrary, as we know, the solar industry is thriving, with massive jobs growth and record deployment of solar installations. The same is true of the wind industry, which grew 21% globally in 2011, “bringing the overall total of installed capacity around the world to more than 238,000 megawatts.” That includes rapid growth in the United States, as these maps illustrate.
The bottom line is this: including the latest study, by Herb Allision, there have now been multiple, independent reports reaching the same basic conclusion – that the Department of Energy Loan Guarantee Program to promote clean energy has been working great, and that criticism is wildly overblown, essentially without any merit whatsoever. Meanwhile, massive, taxpayer-funded corporate welfare continues to the fossil fuel industry, without hardly any media attention at all. As the White House says, “It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and invest in a clean energy industry that’s never been more promising.” We couldn’t agree more.