Media Matters’ watchdogs earlier this fall found that Fox News had aided Republican efforts to make Solyndra the face of clean energy in 2012 by incessantly covering it a year after the California company declared bankruptcy.
The mainstream media didn’t fare much better in Media Matters’ analysis. MSM outlets, it said, have disproportionately hosted opponents of clean energy to discuss Solyndra, uncritically repeating allegations that Solyndra’s loan guarantee was politically motivated.
Actually, there may be something to these allegations, given reports in recent days about how a senior Energy Department official had pushed the White House budget office to approve the government’s loan.
Still, whether we’re talking about Solyndra or, more locally, the failure of Loveland-based Abound Solar, there’s been a lot missing from the discussion.
So, what parts of the story aren’t being told? A lot, as it turns out.
Our energy reporter Steve Lynn, digging into Department of Energy documents, helped fill in a huge gap in the public’s understanding of the Abound Solar failure with his story in the Nov. 2 issue of this paper.
In case you missed it, the big news in Steve’s piece is that, while Abound Solar has blamed Chinese competitors for its demise, the company was plagued by a series of production problems in its panels.
In other words, Abound Solar’s troubles are the result of something that went wrong on its manufacturing flood rather than an indication that U.S. panel makers in general can’t compete. Sure, the solar industry isn’t doing too hot at the moment. But it doesn’t look as if the implosion at Abound Solar is the start of a greater industry-wide collapse.
Congress has been holding hearings on the DOE loan-guarantee program this year; it’s not hard to imagine that critics of the program, which in part helped finance Abound Solar, might use Steve’s reporting to advance their argument that the program should be shut down.
Doing so, however, would ignore some bigger truths that argue in favor of maintaining, if not expanding, the program. The fact is, the program has been a lot more successful than the Solyndra or Abound Solar headlines would lead us to believe.
As reported on the Bloomberg government blog earlier this year, the default rate for power-generation projects in the DOE’s loan-guarantee program – which make up 87 percent of the value of the guarantees – is far lower than other types of projects.
That’s because DOE requires the power-generation projects to find buyers for their generated power. The same requirement does not apply to manufacturing, fuel production and storage projects.
It’s also important to note that some measure of failure was expected. The DOE set aside $2.47 billion to cover project losses. That’s enough money to cover defaults of all the higher-risk projects in its loan-guarantee portfolio and have money left over.
Also, the DOE’s loan-guarantee commitments are not included in the federal budget, which is limited to direct expenditures. As of this spring, the program had paid for itself with fees from applicants. So ending it would have no budgetary impact and would hurt the potential of not just renewable energy projects but also those involving nuclear power, advanced fossil fuel and carbon technology.
As Bloomberg also noted, government loan guarantees aren’t new; they were used during the Great Depression to help Americans buy homes. Moreover, the government has about $1 trillion in loan guarantees including some made through the Agriculture and Veteran’s Affairs departments. The DOE program is less than 2 percent of the government’s total loan-guarantee commitments.
Now, having said all of that, reforms to this program look to be in order. Here are a couple that I hope get some real attention on Capitol Hill:
1. Improve oversight. We need to install dispassionate, third-party overseers who can help carefully assess these deals before they’re approved and after the dollars begin flowing. Also, the boards of every company that receives a loan guarantee should include a trustee of sorts to watch after our tax dollars.
2. Require greater transparency. The DOE requires recipients of its loan guarantees to provide quarterly reports on progress or any problems. That’s good. But it needs to go further. Those reports should be posted on the DOE website for all to see. The media should not have to file time- and energy-consuming Freedom of Information Act requests to access this information. Greater transparency will only help ensure that foes and friends of the program are fully informed and fill in any gaps left by the media.
Finally, here’s one more important fact to consider in this debate:
Solyndra’s loan was 3 percent of the DOE portfolio. Abound Solar’s was even less.
Allen Greenberg is the editor of the Northern Colorado Business Report. He can be reached at 970-232-3142 or firstname.lastname@example.org.