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U.S. Energy Dept to offer loan aid to renewable energy companies

Source: Reuters - Fri, 28 Mar 2014 22:07 GMT
Author: Reuters
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By Ayesha Rascoe

WASHINGTON, March 28 (Reuters) - The U.S. Energy Department will soon issue a plan to offer loan aid for renewable energy projects, Energy Secretary Ernest Moniz said on Friday, doubling down on investments that have drawn intense criticism over past government-backed business flops.

A department loan program funded by the 2009 economic stimulus law that backed solar, wind and geothermal projects was widely attacked by Republicans after the high-profile failure of solar panel manufacturer Solyndra.

Despite the bankruptcy of Solyndra and other recipients of department funds, the Obama administration has stressed that most of its energy investments have been successful, refusing to bow to calls to scrap its remaining loan programs.

"We will have another call in the loan program for renewables and efficiency in the not-too-distant future," Moniz said at a policy forum for the American Council on Renewable Energy.

He did not specify how much loan aid would be offered or specify the type of projects the department would seek to fund.

The department issued a plan last year to offer up to $8 billion in loan assistance for fossil fuel projects that reduce greenhouse gas emissions.

No loan guarantees have been issued under that proposal yet.

Moniz pointed to the success of utility-scale solar power plants backed by the department through the stimulus package as an example of what the administration hopes to continue to accomplish.

Solar power plants are now being built in the United States by private companies without federal loan aid.

"We want to fund some of the first movers that push the technology out there and then have the private sector expand it," Moniz said.

Critics of the loan program have accused the administration of favoring political allies. They argue that the government should not be picking winners and losers in the energy market.

A 2005 law established a multi-billion dollar Energy Department loan program to help finance ground-breaking energy technologies. The proposed fossil fuel project loans would be funded under this long-stalled measure and the renewable energy projects likely would be, as well.

Loan aid through the program has been hampered by an arduous application process and stringent conditions for approval. The department has pledged with its latest loan proposals to end the logjam. (Reporting by Ayesha Rascoe; Editing by Dan Grebler)

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