The federal government's now controversial $535 million investment in Solyndra Inc. tells only a small part of the story of how the U.S. Department of Energy (DOE) is deeply subsidizing green energy projects in Southern California. All these California investments ipso facto involve size-able risks to taxpayers. If they weren't "risky" projects, private investors would be totally funding them; as it is the biggest investors in these projects are U.S. taxpayers.
As President Obama comes to LA for two fund-raisers tonight, one question might be: will any of the private investors in California's heavily-subsidized green projects be on hand at the House of Blues ($250/head) and at Fig and Olive ($17,900/head) events to thank the president for his administration's support with some "green" contributions of their own to the president's reelection effort?
The size of the DOE's bet through its "loan guarantee" program on California green energy/solar power projects has reached $4 billion according to a Brookings Institution report highlighted two weeks ago by the House Oversight Committee's ranking Democrat, U.S. Rep. Elijah Cummings. This report was held up by Cummings as a rebuttal to claims by the committee's chairman, U.S. Rep. Darrell Issa, R-San Diego, that the Obama administration entire stimulus plan (the 2009 American Recovery and Reinvestment Act), which included $41.7 billion in spending on green projects, had been a "failure." Last week, Issa further focused his attack in a congressional hearing entitled "How Obama's Green Energy Is Killing Jobs." The Brookings report, Cummings claimed, put the lie to Issa's assertions by concluding that green energy:
(1) employs 2.7 million Americans--more than the fossil fuel industry and twice the
size of the bioscience sector;
(2) grew more slowly than the national economy since 2003, but produced
"explosive" jobs gains in newer segments and outperformed the nation during the
(3) is manufacturing and export intensive, and offers more opportunities and better
pay for low- and middle-skilled workers than the national economy.
The Brookings report went on to list the federally-subsidized green energy projects in California, many approved for government support just in the last few months. The headline-grabber among all these, of course, has been the Solyndra project, which got a $535 million loan guarantee. The Solyndra loan has turned into a political football after the company declared bankruptcy on Sept. 6 and was raided by FBI agents amid reports (including a front-page New York Times article that outlined Solyndra's campaign of lobbying the White House in the period leading up to DOE's decision to okay its loan). Solyndra's top executives last Friday pleaded the Fifth Amendment when they appeared before a House committee to testify on their loan deal; it was quite a spectacle as the pair remained mute while being battered by insinuating questions from GOP congress members.
Last week, LA Observed reported that another company, BrightSource Energy Inc., received a $1.6 billion loan guarantee from the DOE for its Ivanpah solar-thermal project in San Bernardino County, and that BrightSource's chairman, Californian John Bryson, the former head of Edison International, was recently nominated by Obama as secretary of the U.S. Department of Commerce (Bryson on June 27th resigned his BrightSource post).
Here are the other DOE funded green energy projects in Southern California identified in the Brookings Institution report:
-The Abengoa Solar Inc. project, in San Bernardino County, is set to receive a $1.2 billion loan under an agreement it reached earlier this month with DOE. According to DOE, this project by the Spanish firm Abengoa will be the "first U.S. utility-scale deployment" of the company's "latest Solar Collector Assembly." The project, DOE added, will create 830 construction jobs but the number of permanent jobs "created or saved" will be 70. Once on-line, DOE says the Abengoa project would fuel the electricity needs of 54,000 homes.
-NextEra Energy Resources, LLC (Genesis Solar) secured an $852 million loan guarantee in August to build a solar plant in Riverside county. According to DOE, that plant will create 800 construction jobs and 47 "permanent jobs created or saved" and generate enough electricity to power over 48,000 homes.
Meantime the DOE has conditional commitments to fund three projects being developed by First Solar Inc. DOE is talking about "partial" loan guarantees of $1.9 billion First Solar's Topaz project in San Luis Obispo, $1.8 billion to the firm's Desert Sunlight project in Riverside County and $680 million "to the firm's Antelope project, in Lancaster, in LA County.
It all adds up to a huge taxpayer bet on the ability of a handful of companies to turn California's sunlight into green energy. That could be a big windfall for the state's environment but - as the numbers point out - the long-term outlook is that these green power projects will create only a handful of permanent jobs.