Over the past few months, “green energy” companies subsidized by the federal government encountered financial difficulties, causing one company to file for bankruptcy. These failures have not deterred the Energy Department, however, which has just announced two new loan guarantees totaling over $400 million. The New York Times reports:
The department will announce Thursday that it has completed a $150 million loan guarantee to 1366 Technologies, a company with a new way to make the silicon wafers used in solar cells. The company, based in Lexington, Mass., is the star pupil of the department’s Advanced Research Projects Agency — Energy, or ARPA-E, which makes grants to entities with radical ideas with great potential value; 1366 appears well on the way to being the first of the project recipients to reach commercial application. […]On Wednesday, the department announced a guarantee for 80 percent of a $344 million private loan to be taken out by SolarCity, which installs and owns rooftop solar systems and sells the electricity generated by them.The company plans to operate up to 160,000 rooftop installations at military bases around the country, mostly on apartment buildings and houses. That would be a huge expansion of rooftop solar systems; there are nearly 160,000 residential and nonresidential installations in the United States today.SolarCity said the plan would create about 750 construction jobs over five years. The company intends to employ veterans or relatives of active-duty personnel to do much of the work, at up to 124 military bases in 33 states. SolarCity said it would install 371 megawatts of generating capacity.
These are appealing ideas and I hope that they work, but these look like political dreams rather than commercial ones. Increasing solar power by installing panels on military bases using the work of veterans is a plan that appears focus-group tested to appeal to every interest group — though private investors don’t seem all that eager to offer the finance.This looks like the perfect green unicorn: an heirloom variety, organically raised, grass fed, free range, locally sourced. Maybe having a captive market on bases will make the thing work out ‘commercially’, but this kind of project design will not solve our jobs or our environmental problems.[This post incorrectly stated that the loan guarantees totaled over $400 billion. The true amount was over $400 million. This error has been corrected.]