‘No More Solyndras Act’ – Will it Hurt U.S Renewables Innovation?
The already uphill battle to promote renewable energy instead of traditional fossil fuels has become even harder. On Friday, September 14th, the US House of Representatives passed the No More Solyndras Act, effectively halting the Department of Energy’s (DoE) loan guarantee program. Republicans wrote the bill because, in light of the Solyndras scandal, they felt that the loans were a poor allocation of public funds. To recall, the DoE gave a $535 million loan to the solar energy company Solyndras in 2009 only to have that same company declare bankruptcy in 2011. To the Republicans, the DoE’s decision to approve this risky loan is indicative of flaws within the applications process.
If the US Senate decides to pass this bill, the DoE would be unable to approve any loan applications filed after 2011. As well, all loans sent in before this deadline can only be approved after a review by the US Treasury Department. This move, which was originally meant to add more controls in the loan application process, essentially shuts down the DoE’s ability to give out loans at all.
So how does the crippling of the DoE’s loan guarantee program hamper renewable energy? The program was created in order to support development in energy technologies such as renewables, nuclear power, and low-emissions fossil energy. Without these loans, research and development for many renewable energy projects will be hampered, if not shut down completely.
What is interesting about this decision is in how it compares to fossil fuel subsidies. Large oil, gas, and coal companies still make good use of subsidies despite having well-developed and high-profit industries. As a result, government investment into these programs are relatively safe; there are rarely any debacles as large as Solyndros when you deal with oil giants. However, it remains to be said that these large oil companies have no need for subsidies – they can rely on profits alone to drive future development.
In comparison, the renewable energy industry is still in its fledgling stages. While the hope and the possibility is there for renewables to be a core part of energy programs, a lot of investment is necessary to bring them up to calibre with the fossil fuel industry. They need these loans and subsidies much more than the larger oil companies. The House’s decision to stop a loan program that’s meant to boost renewable energy development is indicative of mistaken priorities.
While other countries, such as Germany and Japan, are openly embracing solar, wind, and biofuel industries in order to lessen their reliance on environmentally-straining fossil fuels, the US is only deepening its ties with oil, coal, and gas companies. The US’ continuing policy to support fossil fuel industries while crippling renewable energy development will eventually come back to haunt it. When the fossil fuels run out and it’s time to make the recision to switch to renewable energy, the US’s renewable energy infrastructure will be years, if not decades, behind the competition.
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