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DOE continued with billions in loans even after Solyndra collapse

October 27, 2011 12:00:00 AM PDT
Despite what happened with Solyndra, the Department of Energy has gone forward with close to $8 billion in loans for other California clean energy companies.

More than half was approved during the final days of the program.

Given the time crunch to get the money out the door, worries still remain that the government may just have made more bad investments.

Sal Zelermyer worked for the DOE back in 2007 while Solyndra was applying for a loan. He's worried there could be more Solyndra's out there.

The Department of Energy got $36 billion from President Barack Obama's stimulus package to fund clean energy projects. That's where Solyndra got its $535 million loan back in 2009.

But even after Solyndra's collapse, the DOE continued to approve loans right up until a September 2011 deadline.

In California, many of those new loans are going to build solar production power, including $1.5 billion for a plant in Riverside County, $646 million for another solar plant in Lancaster, $1.2 billion for a solar plant in San Bernardino and $1.2 billion for another plant in San Luis Obispo.

One of the companies, SunPower, posted a loss of nearly $150 million on Aug. 9, and its stock is down 25 percent. Just one month later, on the eve of the loan program deadline, the DOE approved a $1.2 billion loan guarantee to the company.

What worries the Government Accountability Office is that when the first loans were given out, some companies didn't receive a full review from the DOE.

"When we looked at the 10 loans that had been committed to as of summer 2010, we found that fully five of those loans had been committed to without having gone through the full battery of independent analyses that are required in the due diligence process. That's a problem," said Franklin Rusco of the GAO.

The GAO wouldn't identify those companies. Still California's clean energy promise is attracting lots of attention. One job fair in Silicon Valley brought dozens of former Solyndra workers who were hoping to find another clean energy job. John Breen was one of them.

"I don't have a job, obviously. But I'm not as worried. I mean, having gone through it once a couple years ago, I know I'll survive it. We'll just make it work," said Breen.

Still, what happens when the government seed money runs out?

Severin Borenstein, a professor at the University of California, Berkeley, feels the government should fund more basic research, not build more factories.

"I think it is very sobering to recognize that what the government lost on Solyndra is more than twice the annual budget of ARPA-E, the organization within DOE that's supposed to be financing basic research and development," said Borenstein.

It may be several years before Californians find out whether Solyndra was just one bad bet or the tip of the iceberg.

SunPower declined to comment, saying they were in their quiet period before their latest earnings release.

The DOE said the newest loans, including SunPower, were approved on the merits and that all loans went through the full vetting process.

Still, House Republicans are calling for the White House to release what it knew about all loans the DOE made.

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