Federal Renewable Innovation Spending Pays Off Big. Go Figure. November 13, 2014

The Federal Renewable Energy loans, so hated by the fossil fuel lobby – are making money for taxpayers.

The Taxpayers win. The Planet wins. Our Children Win.

Clean energy haters in Congress failed to return calls for comment.

Reuters:

The controversial government program that funded failed solar company Solyndra, and became a lighting rod in the 2012 presidential election, is officially in the black. According to a report by the Department of Energy, interest payments to the government from projects funded by the Loan Programs Office were $810 million as of September – higher than the $780 million in losses from loans it sustained from startups including Fisker Automotive, Abound Solar and Solyndra, which went bankrupt after receiving large government loans intended to help them bring their advanced green technologies to market. Still, the federal loans program is a success for taxpayers, judging by the numbers in the new report, the DOE said. After Solyndra’s 2011 collapse, the program was sharply criticized by Republican lawmakers as a waste of public money and a fountain of cronyism. The outcries mounted as others in the program failed, and the DOE issued no new loans between late 2011 and this year.

International Business Times:

The U.S. Department of Energy’s controversial loan program for risky and innovative companies — including the now-defunct solar firm Solyndra LLC and Tesla Motors Inc. — has officially wiped out its losses. On top of that, the federal agency says it now expects to earn more than $5 billion from the program, according to a new report. The results offer a sense of vindication to the Obama administration and the program’s backers. During the 2012 presidential elections, Republicans seized on the failure of Solyndra and a handful of other clean-energy firms as examples of wild misspending and “crony capitalism” during President Barack Obama’s first administration. Energy officials maintained that the program, which began under the George W. Bush administration, was critical for advancing the types of cutting-edge technologies necessary for reducing greenhouse gas emissions and fighting climate change. Projects funded by the Loan Programs Office made $810 million in interest payments in September, according to the report released Wednesday. That’s higher than the $780 million in losses from loans it sustained when startups including electric-car maker Fisker Automotive, panel manufacturer Abound Solar and Solyndra went bankrupt after taking large government loans. “Taxpayers are not only benefiting from some of the world’s most innovative energy projects… but these projects are making good on their loan repayments,” Peter Davidson, executive director of the Loan Programs Office, told Reuters. “Every month money continues to roll in” from interest payments, he said, and losses aren’t expected to rise significantly. “We feel very confident that going forward our portfolio is much less risky than it has been,” he told Reuters.

Department of Energy:

At the Department of Energy’s Loan Programs Office (LPO), each project in our portfolio that comes online is an important achievement in our all-of-the-above energy strategy. In the five years since it issued its first conditional commitment, LPO has helped launch the utility-scale photovoltaic (PV) solar industry, deploy the next generation of concentrating solar power, revitalize the U.S. nuclear industry, commercialize cellulosic biofuels, and accelerate the growth of advanced and electric vehicle manufacturing. We think those results show that LPO is succeeding in its mission to help finance the first commercial deployments of innovative technologies in the U.S. In addition to working toward our mission, we take our responsibility to protect taxpayer interests very seriously. The best perspective for assessing LPO’s financial performance is to look at the portfolio in its entirety. And, as a whole, the portfolio is performing very well. As of September 2014, 20 projects supported by LPO are operational and generating revenue. These projects are now repaying their loans to the U.S. Treasury, which issued the loans guaranteed by the Department through the Federal Financing Bank. Already, $3.5 billion in loan principal has been repaid on these long-term loans, which have an average tenor of 22 years. In addition, more than $810 million in interest payments have already been earned. For loans that have been disbursed to date, we expect to earn more than $5 billion in total interest payments over the full term of the loans — all of which goes back to the benefit of taxpayers.

Business Week:

The results contradict the widely held view that the U.S. has wasted taxpayer money funding failures including Solyndra, which closed its doors in 2011 after receiving $528 million in government backing. That adds to Obama’s credibility as he seeks to make climate change a bigger priority after announcing a historic emissions deal with China. A $5 billion return to taxpayers exceeds the returns from many venture capital and private equity investments in clean energy, said Michael Morosi, an analyst at Jetstream Capital LLC, which invests in renewable energy.

NPR:

Overall, the agency has loaned $34.2 billion to a variety of businesses, under a program designed to speed up development of clean-energy technology. Companies have defaulted on $780 million of that — a loss rate of 2.28 percent. The agency also has collected $810 million in interest payments, putting the program $30 million in the black. When Congress created the loan program under the Energy Policy Act of 2005, it was never designed to be a moneymaker. In fact, Congress imagined there would be losses and set aside $10 billion to cover them. Still, when the Solyndra case emerged, Republicans on Capitol Hill had pointed criticism for the Obama administration. Rep. Steve Scalise, R-La., called the Solyndra case “disgusting,” and Sen. Lisa Murkowski, R-Alaska, labeled it “a colossal failure.” The conservative group Americans for Prosperity produced a television ad accusing President Obama of paying back campaign contributors. There was an FBI raid on Solyndra’s headquarters and an investigation but, so far, no prosecutions. Now that the loan program is turning a profit, those critics are silent. They either declined or ignored NPR’s requests for comment. And with that, Energy Secretary Ernest Moniz wants to change people’s perception of his agency’s loan program.