The program that funded Solyndra is now turning a profit for the federal government and taxpayers.
The U.S. expects to earn $5 billion to $6 billion from the federal program that funded flops including Solyndra, bolstering President Barack Obama’s decision to back low-carbon technologies.
It’s the first time the Energy Department has released an estimate of the potential gains for the loan guarantee program, designed to back clean-energy projects when venture capital or financing from banks and other investors is unavailable. The department expects a loss rate of about 2 percent on $32.4 billion set aside for loans to spur energy innovation, according to a report Thursday.
The results contradict the widely held view that the U.S. has wasted taxpayer money funding failures including Solyndra, which closed its doors in 2011 after receiving $528 million in government backing. That adds to Obama’s credibility as he seeks to make climate change a bigger priority after announcing a historic emissions deal with China.
A $5 billion return to taxpayers exceeds the returns from many venture capital and private equity investments in clean energy, said Michael Morosi, an analyst at Jetstream Capital LLC, which invests in renewable energy.
The program’s biggest success story has been Tesla Motors Inc. The Elon Musk-backed electric carmaker paid back its $465 million federal loan nine years early. Abengoa SA, which received a $132.4 million guarantee, opened in October a biofuels plant in Kansas.
The federal government will see a bigger return than much of the revered private sector thanks to the president’s persistence.
Congressional Republicans have tried to kill the loan program several times over the past four years.