On Wednesday, July 25, the U.S. House Energy and Commerce Subcommittee on Energy and Power approved what’s being dubbed as the ‘No More Solyndras Act’. The act would effectively end the Department of Energy’s Loan Guarantee program. The move is the latest in a string of Republican efforts to remind the American public of the failure of Solyndra after receiving a $535 million loan guarantee under the program, granted during the Obama Administration.
The loan guarantee program was created to help new technologies gain access to lower-cost capital as they tried to cross the “valley of death” from the research and development side of a technology to commercialization of that technology. The valley of death has several significant areas where companies, even with the support of angel investors and the government, are most likely to fail as they search for financing to help them grow.
It’s a case of voting for something before voting against it. The loan guarantee program was enacted under the Energy Policy Act of 2005. That legislation was passed with the support of 200 Republican Representatives at the time, including a number on the subcommittee who voted to end the program this week, including Ed Whitfield, Ky., John Sullivan, Okla., John Shimkus, Ill., Greg Walden, Ore., Lee Terry, Neb., Michael Burgess and Joe Barton, both of Texas, and Fred Upton, Mich. In fact, the only Republican to vote against the act on the subcommittee was Brain Billbray, Calif. Some Republicans were reportedly concerned about the bill including both Texas Reps. on the subcommittee as well as Georgia Rep. Phil Gingrey.
The House and Republican leadership are trying to score political points ahead of November’s election and pushing to move the legislation forward. “Rep. Whitfield, the Chairman of the House Energy and Commerce Energy and Power Subcommittee, indicated publicly a desire to have the bill on the House floor in September, but nothing has been scheduled at this point,” said Manning Feraci, vice president of Legislative Affairs at Solar Energy Industries Association. While the legislation may ultimately pass the House, its chances to pass the Democrat-controlled Senate are highly unlikely.
The next step for the legislation is to go to the full Energy & Commerce committee. “Expect that to happen next week,” Feraci said.
“Both Congress and the administration have identified ways to improve the Department of Energy Loan Guarantee Program,” SEIA President Rhone Resch said in a release. “Unfortunately, the provisions approved by the subcommittee today simply ‘throws the baby out with the bathwater.’”
Resch said that the program has enabled 11 utility-scale solar power plants in the Southwest to get underway and contended that these are financially sound projects with guaranteed revenue streams. The DOE said the programs have created more than 60,000 jobs and, in all, has issued $34.7 billion in loan guarantees. Overall, the program has been more successful than Congress initially anticipated and has not come close to drawing down the losses anticipated in the program.