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Internal report slams U.S. handling of Abound Solar guarantees

Source: Reuters - Thu, 17 Apr 2014 20:55 GMT
Author: Reuters
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By Valerie Volcovici

WASHINGTON, April 17 (Reuters) - The U.S. Department of Energy displayed a "lack of guidance" in how it dealt with millions of dollars in loan guarantees to now-bankrupt Abound Solar Manufacturing, the agency's internal watchdog said in a report on Thursday.

The DOE in recent years has tried to help commercialize the production of solar equipment such as panels and photovoltaic modules with a series of loan guarantees.

The program was savaged by Republican lawmakers after the high-profile bankruptcy of California-based solar manufacturer Solyndra in 2011. The latest audit of loan guarantees to Abound could re-open those wounds.

In a 32-page report, the DOE's Inspector General reviewed the case of Colorado-based Abound, which filed for bankruptcy protection in June 2012 and laid off more than 100 employees, after receiving about $70 million of a $400 million loan guaranteed by the government.

Although the DOE said it had identified and taken steps to mitigate risks, and suspended funding when the company failed to meet certain milestones, the IG report said the loan guarantee program had not established "comprehensive policies, procedures and guidance for awarding, monitoring and administering loans."

"We noted a lack of guidance in the areas of the Board's reconsideration of loans, the processes for resolving differences in professional opinions among the Program's technical experts, the nature and timing of financial and industrial analysis, and the management of distressed loans," the report said.

The DOE is taking steps to improve its records management system and has hired additional staff for its portfolio management process, the report noted.

Since the Abound situation, the DOE also set up a risk committee.

To read the entire report on Abound, see: http://energy.gov/sites/prod/files/2014/04/f15/DOE-IG-0907.pdf

Undeterred by problems with its loan guarantees, the Obama administration on Thursday convened a "Solar Summit" to promote the use of the technology by private companies.

The White House also said it would lend staff and technical support to other parts of the administration to expand the use of renewable energy in federally subsidized housing.

The administration hopes to narrow the cost gap between solar and more traditional energy sources by reducing red tape and encouraging public-private partnerships.

Some $15 million will be set aside for state, local and tribal governments to build their solar portfolios.

Renewable energy now accounts for around 5 percent of electric generation in the United States. Solar comprises less than 1 percent, although its use is on the rise. (Reporting by Valerie Volcovici, editing by Ros Krasny and Alden Bentley)

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