The U.S. Government Has Invested $34 Billion in Renewable Energy—and It’s Making a Profit
Is the United States government a savvier investor in green technology than Silicon Valley’s masters of the universe?
It sure looks like it, judging from the U.S. Department of Energy’s new report on the performance of its $34.3 billion portfolio of investments in solar power plants, wind farms, and other renewable energy projects. The Obama administration in 2009 charged the DOE’s Loan Programs Office with jump-starting cutting-edge green technology ventures deemed too risky and expensive to attract cash from private investors.
As of September, that portfolio had a loss rate of 2.28 percent and has made a profit of $30 million.
The typical loss rate for a venture capital firm’s portfolio? As many as 40 percent of those companies fail, according to a 2012 Harvard Business School study.
There are now 20 projects funded by DOE up and running.
“These projects currently produce enough clean energy to power more than 1 million American homes (roughly the size of Chicago), have supported the manufacturing of more than 8 million fuel-efficient vehicles, and have avoided carbon pollution equivalent to taking more than 3 million cars off the road,” states the report, which notes that the program has created or saved 55,000 jobs.
The DOE has so far disbursed $21.7 billion and collected $3.5 billion in repayments and $810 million in interest. Losses have totaled $780 million.
A half-billion dollars of that loss came from the 2011 failure of Solyndra, a Silicon Valley solar panel manufacturer whose bankruptcy made it a poster child for Republican attacks on the loan program. (Private investors, including some of Silicon Valley’s most renowned venture capitalists, lost more than $600 million on the company.) Solyndra was one of several makers of advanced solar technology in the U.S. that found themselves unable to compete against a flood of cheap solar panels made in China.
As the DOE report indicates, Solyndra was an outlier rather than an indicator of its portfolio’s performance. The agency, meanwhile, still has $40 billion left to spend.