Solyndra was not the first alternative energy company to receive federal funding with little promise of repayment, nor will they be the last unless we make drastic changes to the way the federal government currently doles out assistance to energy companies. With no oversight from the general public, the federal government provided over $36 billion in funding for Solyndra development. The failure of companies like Solyndra and Abound Solar should prove that Obama’s green energy loan guarantee program is neither cost efficient nor effective. Time and time again, our government has handed billions of dollars in aid to companies that have no intention of paying that money back. When these companies inevitably fail, the government—and the taxpayer—are left to foot the bill for the entire failed project. When we are facing such a high debt and deficit, we must make each economic choice as carefully as possibly, and we can no longer afford to sponsor failing energy companies.
In the status quo, we provide federal funding to companies that hold patents for innovative ideas. This means that a company with no proven track record in terms of actual development may be eligible for a loan or loan guarantee, if they happen to hold the patent for a new or innovative technique. Government officials should change the way that they approach investment strategies. If government intervention truly is necessary to make a particular form of energy viable for production, we should not invest in singular companies. Rather, we should invest in energy options across the board. The Obama-Biden administration has been attempting to pick winners and losers by picking their favorite companies, and our nation cannot afford to allow that behavior to continue. Republicans have already begun to pass bills in the House to limit the ability of the federal government to hand out loans to personal favorites, though these bills have largely been political moves. We should strengthen this legislation and make it much more difficult to receive federal funding. Legislation passed to monitor the provision of federal loan guarantees should invest energy in an entirely new area: strictly outlining the procedure for a company filing bankruptcy that has borrowed such large amounts of money from the U.S. federal government. These companies should not be able to reward company leadership with extravagant bonuses with the remaining funds they do have— they should be required to use that capital to make attempts to re-pay the funds.
Investments should not be made in companies that will result in a net loss in taxpayer dollars. If, as in the case of Solyndra, collected data indicates a strong likelihood that the company will be completely underwater in six months, that company should not be a candidate for investment. That company will never be the only one with the potential to succeed in the industry, and our government should begin to err on the side of caution when pledging our tax dollars to private companies. We should always have an exit strategy that allows us to recoup some of the money that we have invested in these companies if, on rare occasion, they do fail or declare bankruptcy. Those companies that do manage to win funding for technologies (that they have already proven they have the ability to produce) should be met with much different criterion than currently exists in these loan programs. Each company should get substantially less money, for example. No company should receive $36 billion in order to attempt to become competitive with other companies in the industry. Secondly, this money should be targeted for very specific purposes, and government oversight should help ensure that the money is spent according to the previous agreement.
It may seem like an extreme solution, but the best move may simply be to end the Department of Energy’s loan guarantee program. Energy companies should expect to compete with each for success with no government help: if these companies cannot find a way to make their technology cost effective, it hardly seems like a worthwhile venture for government aid. Providing federal loan guarantees to energy companies certainly seems to be costing additional taxpayer dollars without securing anything in return. Policies with such a high rate of failure should, logically, be terminated. As a country we cannot afford to continue to fund frivolous programs that fail to achieve their objective.
Holding Our Officials Accountable
It is not simply private companies which have disappointed us, however. Our own government officials not only exercised extremely poor judgment by condoning and encouraging investment in companies that were doomed to fail, but they also hid that information from the taxpayers. The Obama administration was well aware of the fact that reports on Solyndra predicted the company would be underwater in less than a year, but because there is so little public involvement in the process of applying for loan guarantees, government officials were able to get away with hiding these briefs. We invested money in a company that failed, in a company that our leaders knew would fail, and we placed our faith in people whom we clearly cannot trust. Political leaders in the White House who chose to provide funding for Solyndra were re-paying a generous donor to the Obama campaign by providing funds for Solyndra’s solar project. In doing so, they prioritized individual political agendas over the welfare of the public.
We can no longer allow public officials to invest our money without scrutiny from an objective third party. Each company applying for federal funding should undergo a thorough vetting process. Unlike years past, when these results were simply filed away in the White House, these should be turned over to a board composed of industry experts and policy analysts, who can help guide federal decisions about industry investments. We cannot expect the government to change their business practices overnight, and we can never expect them to change their business practices if we do not first demand that the government remembers where it gets its power from— the American people.
©2012 Off the Grid News