The Department of Energy has a $34 billion portfolio of loan guarantees to solar, wind, nuclear and other clean energy companies. In May it was released that just 2% of that portfolio represent losses, about $680 million. Still, with so many high-profile green start-up bankruptcies as of late, it’s worth revisiting the question of how involved should government get in the clean energy business.
Many of the failing clean energy companies that account for the losses made headlines, such as A123 Systems, Solyndra, Vehicle Production Group, and ECOtality, all of which declared bankruptcy despite receiving millions of dollars in government green loans. Meanwhile Fisker Automotive is holding on by a thread, taking almost $200 million in government funds and the livelihoods of thousands of employees down with them. Yes, the very public collapse of these clean energy companies is troubling.
Yet these losses only represent 2% of the entire green energy portfolio, of which more successful companies like Ford and Tesla Motors are also a part of. And as history has shown, government investment in technology can pay massive dividends. I cannot think of a better example of government investing in unproven technology than the government’s investment in NASA during the dawn of the space age and the race to the moon against the Soviets. That investment worked out pretty well and brought with it a plethora of new technology that we as consumers now use every day. That said, some areas of green energy investment should be left to private companies.
Fast forward to today and clean energy companies like Tesla have brought in almost $1 billion in revenue. Meanwhile Bright Source Energy Inc. will begin generating power from a new solar plant, the largest of its type in the world, based in the Mojave Desert. Both companies have become leaders in their field, but used government grants to get started. Worthless investments? I don’t think so.
The federal government needs to invest in clean energy and clean energy companies, which is just as important, if not more so, than America’s lunar program. While countries like China and Germany invest untold billions into solar panels and alternative energy sources, America continues to bicker over whether the government should be involved in green energy at all.
I really believe that if the American Government could get its act together, than the effort to transition America away from fossil fuels and into clean energy could act as a modern day Civilian Conservation Corp. This would not only get Americans back to work, but it would teach useful skills to a population that is losing ground due to an increasingly competitive global market. Imagine a massive solar-installation program on every Federal building in America, massive wind farms powering the Great Plains, or the conversion of every government to a cleaner-burning alt-fuel, like CNG or biodiesel.
But none of that can happen when a country is unwilling to reinvest in itself.
Source: Wall St. Journal
Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor’s Degree in Government and International Relations from Clark University and a Master’s Degree in Political Science from Northeastern University. Being an Eagle Scout, Andrew has a passion for all things environmental. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail. You can follow Andrew on Twitter @AndrewMeggison