Biden’s energy department revives loan program to boost clean technology

As part of its clean-energy agenda, the Biden administration is reviving an energy department program that disbursed billions of dollars in loan guarantees to companies such as electric car maker Tesla and the failed solar company Solyndra, the energy secretary, Jennifer Granholm, says.

The loan program helped launch the country’s first utility-scale wind and solar farms as part of the Obama administration’s efforts to create “green jobs” but largely went dormant under Donald Trump.

The program boosted Tesla’s efforts to become a behemoth in electric cars, but it stumbled with a major loan guarantee to Solyndra, the California solar company that failed soon after receiving federal money a decade ago, costing taxpayers more than $500m.

Republicans and other critics cite Solyndra as an example of wasteful spending under Barack Obama’s stimulus program, and the loan guarantees have largely dried up in recent years. The energy department provided $12bn in guarantees for the Vogtle nuclear power station in Georgia, but few other loans were offered under Trump.

When running for office, Joe Biden put forth a $2tn plan to eliminate all greenhouse gas emissions from the US electricity grid within 15 years, a goal that was applauded by climate campaigners but was criticized for the enormous overhaul it will require.

The restart of the energy department’s loan program – which was once a major tool the federal government had to incentivize clean energy innovation – gives the Biden administration a chance to redeem it after Solyndra’s fall.

Granholm said up to $40bn in guarantees will be made available for a variety of clean-energy projects, including wind, solar and hydro power, advanced vehicles, geothermal and even nuclear.

“It’s got to be clean. That’s it,” she said. “And when I say clean, you know, it’s technologies that are being researched in the lab,” like projects to capture and store carbon dioxide emissions, so-called green hydrogen fuel and other energy sources, she said.

The program will be overseen by Jigar Shah, a longtime clean-energy entrepreneur who helped pioneer solar power in the US. Shah told Bloomberg News that his leading the program will “make it more accessible and make entrepreneurs feel like someone who has been in their shoes before is there and will give them a fair hearing.”

While Republicans are likely to focus on avoiding a repeat of Solyndra, Granholm, a former Michigan governor, said Tesla is a better example. The company’s founder, Elon Musk, repaid the loan in full years ahead of schedule and Tesla is now one of the world’s leading makers of electric cars and battery storage.

“I mean, obviously that was two administrations ago,” she said, referring to Solyndra, which went bankrupt in 2011. “We’ve learned a lot since then. People understand that when you invest in technology that is new, you’re going to have some that don’t succeed.”

Still, the loan program overall has returned more than $500m to taxpayers, “people paying back their loans with interest”, Granholm said.

On other topics, Granholm said she thinks electric utilities can reach Biden’s goal of 100% clean electricity by 2035. The head of a utility lobbying group said last month that the 2035 date would be “an incredibly difficult situation to handle” for most US electricity providers.

Getting to 80% or 90% of clean electricity is “doable”, she said. “And the last bit is going to be harder, but we have to do it.” The good news is that companies have time to make the transition and improve the technology needed produce clean power at a larger scale, she said.

Granholm also pledged that the energy department would be part of Biden’s commitment to environmental justice. Shalanda Baker, deputy director for energy justice and Granholm’s equity adviser, will lead the effort, targeting disadvantaged communities that have lost jobs in coal mines or power plants or are located near refineries, incinerators or other hazards.

Biden has pledged that 40% of the benefits of clean-energy investments will go to disadvantaged communities, “so that they are not forgotten, not unseen”, Granholm said.

Granholm, who took office 25 February after being confirmed by the Senate, said her first week on the job “has been an amazing, under-the-firehose learning experience”.