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After Solyndra, Other Energy Loans Draw Scrutiny

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After Solyndra, Other Energy Loans Draw Scrutiny

Energy

After Solyndra, Other Energy Loans Draw Scrutiny

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MELISSA BLOCK, host: We're going to hear now about the Department of Energy, specifically about the program that issued half a billion dollars in loan guarantees to the now-bankrupt solar company Solyndra.

News surfaced today that some voices inside the White House argued against President Obama's visit to Solyndra in May of last year. In one email, an official at the Office of Management and Budget wrote: I am increasingly worried that this visit could prove embarrassing to the administration in the not-too-distant future. Now, we're going to focus on the other clean energy project and companies that were helped by the loan guarantee program, which ended on Friday.

As NPR's Yuki Noguchi reports, it financed 28 projects in all with $16 billion in loan guarantees.

YUKI NOGUCHI: Florida Republican Cliff Stearns chairs an energy and commerce subcommittee on oversight and investigations. Stearns is now critical of the program he originally supported when Congress created it.

Representative CLIFF STEARNS: I think the administration is putting taxpayers' money at risk in areas that are not creating jobs.

NOGUCHI: In all, the Energy Department says the projects will create about 17,000 construction and permanent jobs. Stearns says he is hugely critical of how loans in the program have been handled. He says they were rushed out the door.

STEARNS: We asked them to hold up any more loan guarantees so that they could be looked at more carefully, so we don't have any more Solyndras.

NOGUCHI: For its part, the Department of Energy denies rushing their processes or playing politics. Over the weekend, Energy Secretary Steven Chu defended the loan program, saying the U.S. could not afford to give up investing in new energy technologies.

Kevin Smith is a CEO of SolarReserve, which is building a two-mile-wide solar power generator in Tonopah, Nevada. He calls getting an Energy Department loan guarantee the most exhaustive vetting process he's been through in 25 years of working in energy.

KEVIN SMITH: It was a pretty brutal due diligence process.

NOGUCHI: The process took two years.

SMITH: Down to the level - I mean, I had questions: Kevin, you went to Sacramento on the 17th of February. You know, was that trip related to the Tonopah project? You know, it's a $500 issue.

NOGUCHI: SolarReserve received its $737 million loan earlier this month. Smith says banks and private lenders simply were not lending enough for a project of this scale, which is why he turned to the government.

But he also says that doesn't mean his project is a risky investment for the taxpayer. SolarReserve is a proven technology and already has a 25-year contract with a utility company.

SMITH: It's like us building a hotel and we've sold out 100 percent of the rooms for 25 years when we start construction.

NOGUCHI: In fact, 16 of the 28 loan guarantees the Energy Department approved are for power generation projects like SolarReserve. They have long-term contracts with utility firms or are, in fact, subsidiary projects of utility companies.

This is why Rhone Resch, who heads the Solar Energy Industries Association, says that the debate over what happened at Solyndra cannot inform the debate about clean energy investment overall.

RHONE RESCH: It's improper to view the entire industry through the lens of one failed company.

NOGUCHI: Resch adds that in the past two years, solar companies have doubled their employment to 100,000 people.

RESCH: We're putting electricians, roofers and plumbers back to work in the solar industry after they've been let go by the housing industries.

NOGUCHI: When I asked Cliff Stearns, the Republican hosting the hearings on Solyndra about the seemingly low-risk revenue models of many of the loan guarantee recipients, he acknowledged those might be safer bets. But he still doesn't like the idea of government putting taxpayers on the line for other ventures.

STEARNS: We can't compete with China to make solar panels and wind turbines.

NOGUCHI: He says he doesn't believe in any type of subsidy for industry. And that where solar is concerned, it makes more sense to invest in research and development on a technology where the U.S. still has a chance of winning.

Yuki Noguchi, NPR News, Washington.

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