Joe Biden is planning on spending a whole bunch of money on clean energy
and to celebrate, Republicans are bringing back one of their favorite scandals -- Solyndra.
Senator Barrasso: "Solyndra Syndrome and the Green Stimulus Delusion"
[funky beats]
About 10 years ago, Solyndra was the hottest thing in solar power
the company was making these cylindrical solar panels: solar, cylinder, Solyndra:
get it? -- which, because of their shape were supposed to be easier to install
and were also supposed to suck up more of the sun's rays. Solyndra was so exciting
that Obama -- who was trying to pull the country out of the financial crisis and also create green
jobs -- decided to give it a $535 million dollar loan guarantee from the Department of Energy.
"Good morning everybody and welcome to Solyndra's Fab 2 groundbreaking."
So here we have the energy nerds, breaking ground on Solyndra -- the main reason that
that happened was because Solyndra was the one that was like the farthest along in the process
of getting approval and they wanted to have, you know a ceremonial groundbreaking moment,
which here it is. It cost the Obama Administration a lot more than that though.
Within two years Solyndra had fallen from its lofty heights. The company was bankrupt,
out-competed by cheaper solar panels coming from China. And republicans had a field day.
Rep Scalise: "This is disgusting! I hope you'll go back in your agency and have some heads roll!"
They launched a big Congressional investigation and the FBI decided to raid Solyndra headquarters.
Solyndra executives took the fifth when asked to testify,
which is not exactly what you want to do if you're trying to make it look like
you did nothing wrong. Mitt Romney even went to Solyndra headquarters
to make a stump speech for his 2012 presidential campaign. "It's also a symbol of gross waste --"
But here's the funny thing. While Solyndra was trying to mass-produce cylindrical
solar panels, a small company on the other side of the Bay Area
was trying to build a factory to make a more affordable electric car.
Elon Musk: "We really need your help -- not for Tesla, but for electric cars in general."
Before Tesla was an EV powerhouse and before Elon Musk decided to colonize Mars, get into Dogecoin,
name his child x ae A-Xii. Yeah before all that -- Tesla had only sold about 1500 cars. So Tesla,
like Solyndra turned to the Department of Energy to look for a loan. The loan was approved and the
company started churning out Model S's like crazy. They also paid the loan back in full and early.
Elon Musk: "Well, it really feels good to have repaid the U.S. taxpayer,
that's really what's important here."
Okay, but let's back up. Why is the government giving out these loans in the first place?Well,
the Department of Energy isn't just responsible for disposing of nuclear waste -- they're also
supposed to develop alternative energy sources... so you know, the planet doesn't burn up. Since
2005, the department has been able to give out two forms of assistance to clean energy companies.
Direct loans, like Tesla, or loan guarantees, like Solyndra -- which are basically promises
to cover a loan if the company goes belly up. But ultimately is this loan program a waste or
a win for the American taxpayer? Let's crunch [can crunching] some numbers. I only half crunched it?
So over the last decade the department of energy has doled out about $30 billion in direct loans
and loan guarantees -- most of that was during the Obama administration, Trump wasn't crazy
about the program and mostly just ignored it. According to the Loan Program's Office at the DOE,
the program has lost about 3.4 percent of its total disbursement. That's 3.4 percent
of 29.62 billion dollars, which works out to about a billion dollars. But if you look the
interest paid on the program is actually 3.27 billion dollars. That means that it's actually
making money. Now, if we're going to be really careful this is calculated without respect to the
treasury's borrowing cost which can affect overall profitability. At the same time,
a former Goldman Sachs investment banker actually says that the DOE
had built a loan portfolio that quote "JP Morgan would have been happy to own."
The program also helped the U.S. to avoid spewing about
60 million metric tons of co2 into the atmosphere.
And right now, the government estimates that a ton of carbon emissions cost the country
about $51 in damages from air pollution, to deadly heat waves, to battered infrastructure.
If you factor that in, the program has actually saved us another $3.3 billion.
So why does everyone only remember Solyndra's failure?
Part of it was that Republicans were looking for a way to attack Obama's stimulus, which,
all things considered, was doing okay at creating jobs and preventing total financial meltdown.
And maybe we've actually been thinking about the loan program all wrong.
The whole point of giving out loans to clean tech companies is not to make
money -- it's to find things that the private sector thinks are too risky to
fund but that could have huge payoffs for clean energy and fighting climate change.
The good news is the Department of Energy is actually planning to revive the program,
but this time focused on new technologies:
geothermal energy advanced nuclear electric trucks and even green hydrogen.
The U.S. has tried for decades to actually get legislation that limits carbon emissions,
but we haven't been able to follow through. The only thing that has actually moved the needle
is just getting really good at using new clean technologies. And according to experts, to get
our emissions to zero we need to invest serious money into getting all these clean technologies
ready to go -- and that means that there are going to be failures like Solyndra.
We need to not get distracted and keep our eyes on the prize:
decarbonization, no more warming than 2 degrees Celsius ,a livable climate.
I'm Shannon Osaka, reporter at Grist covering climate policy,
the energy transition, and electric vehicles. If you have any questions or
ideas for future videos that I should do drop it in the comments below.