The Real Solyndra Scandal. It’s that no one’s noticed the enormous success of the government program

ScienceRocks

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Mar 16, 2010
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The Real Solyndra Scandal. It’s that no one’s noticed the enormous success of the government program behind it. Last fall the department said the program had received $810 million in interest payments, which would more than make up for the $780 million in losses it had suffered on soured loans.


On Thursday, Peter Davidson, the official who took over the controversial, much-mocked Energy Department Loan Programs Office in 2013,announced he’s stepping down. Created during the Bush administration, the program received a huge influx of funds as a result of the 2009 stimulus bill, which it lent to a range of companies in the energy and transportation industries.

Early on, the program was known for its failures, especially Solyndra, which was like Benghazi before Benghazi was Benghazi—a three-syllable slogan that signified to conservatives the Obama administration’s fecklessness. A startup solar panel manufacturer, Solyndra received a $535 million loan guarantee and in 2011 went bankrupt. The program had other high-profile face-plants, including Fisker Automotive, a startup electric car-maker that went bust, causing the government towrite off $139 million of the $192 million loan it made.

But lending to high-risk startups was only a small portion of the program’s portfolio—some $30 billion doled out to 30 companies and projects. The loans fell into three broad categories: startup manufacturers like Solyndra and Fisker; established automakers like Ford, which took a $5.9 billion loan in September 2009 to modernize its plants, and Nissan, which got $1.4 billion; and projects like solar and wind farms that would produce energy and sell their output to utilities. Far from the scandals that animated conservatives, most of these loans are doing quite well. They’re virtually all current, paying interest and principal every quarter. Indeed, the interest payments received so far outweigh the losses on the failed borrowers. And the gains for the U.S. power industry at large have been far greater.

I just lol'ed
 
So the only ones paying the money back are established industry companies and not solar panel makers. And how does interest on one loan make up for principal on another. Really the interest lost on the defaulted loan has to be added to the loss column. The success of any solar or wind farm has to be judged over time, not enough time yet.
 

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