The U.S. House of Representatives on Sept. 14 passed a bill that would end the federal loan guarantee program that aided clean energy projects nationwide, including the bankrupt Solyndra, and became a proxy in the battle over renewables.
The “No More Solyndras Act” passed on a mostly party-line vote of 245-161, with 22 Democrats and four Republicans breaking ranks with their caucuses.
The Democratic-led Senate is expected to ignore the bill.
The bill gets its name from the bankrupt Solyndra, the California solar panel manufacturer that was the first clean energy company to receive a loan guarantee under the program in 2009, for $535m. The company declared bankruptcy a year ago.
The bill would prevent the Department of Energy from approving any loan guarantee applications filed after 2011. Projects already in the pipeline could go forward after additional review by the Treasury Department.
Chairman of the House Energy and Commerce Committee, Rep. Fred Upton, R-Mich., advocated a fossil-fuel heavy “all-of-the-above” energy strategy in floor debate.
“But support for this agenda also requires us to pull the plug on existing programs that are not working. And the Department of Energy’s Title 17 loan guarantee program is simply not advancing the ball on our all-of-the-above goals. The No More Solyndras Act phases out this costly, ineffective, and mismanaged program,” Upton said.
A Republican-led investigation charged that political favoritism caused a faulty review of the company’s dim prospects and that the Obama administration was determined to make Solyndra the first loan guarantee recipient and a showcase for clean energy policies.
Ranking Democratic member of the subcommittee on oversight and investigations, Rep. Diana DeGette of Colorado, disputed those characterizations.
“The career officials and Bush and Obama Administration appointees who worked on this loan told our investigators that political considerations played no role in decisions on Solyndra. They told us that there was no improper pressure to rush key decisions on the loan, to approve the loan, or to change the terms of the loan. Each and every one of these officials confirmed that there were no corners cut in the process and that decisions were made purely on the merits,” DeGette said.
Defenders of Solyndra and the loan program say the company failed in part because no one in the industry foresaw the collapse in solar panel prices that occurred in the two years after the loan guarantee was approved. Those prices made Solyndra’s panels uncompetitive and the company eventually closed its doors.
While the company was struggling, additional private investors were found but in order to attract the additional financing, the rights of the government to recover assets in the event of a company failure were “subordinated” to the private financiers. Little if any of the money that the government program guaranteed is expected to be returned to the taxpayers.