After Solyndra bankruptcy, White House defends clean energy investments

The Obama administration is launching a full-court press to defend its clean energy investments just two weeks after a solar company that received a $535 million loan guarantee from the Energy Department declared bankruptcy.

The bankruptcy of California-based Solyndra underscores the need for the United States to double down on investments in clean energy, Jonathan Silver, the executive director of the Energy Department’s Loan Programs Office, will argue Wednesday during an oversight hearing in front of a House Energy and Commerce Committee panel.

{mosads}“The question is whether we are willing to take on this challenge, or whether we will simply cede leadership in clean energy to other nations and watch as tens of thousands of jobs are created overseas,” Silver says in his written testimony, excerpts of which were provided to The Hill by the Energy Department.

“We were once the leaders in this field, and we can be again.”

The House hearing marks the first time that Obama administration officials will speak publicly about the bankruptcy.

Republicans have pounced on the incident, arguing that the Obama administration’s push to create “green jobs” blinded officials to a series of red flags that hinted at the company’s financial troubles.

And pressure on the White House over the incident is likely to increase Wednesday. Emails obtained by The Washington Post show that the White House tried to rush the decision on Solyndra’s financing so that Vice President Joe Biden could announce approval at the September 2009 groundbreaking for the company’s new factory.

“The August 2009 e-mails, released to The Washington Post, show White
House officials repeatedly asking OMB reviewers when they would be able
to decide on the federal loan and noting a looming press event at which
they planned to announce the deal,” the story states.

More broadly, the bankruptcy offers the GOP a new opportunity to attack President Obama’s push to develop a “clean energy economy,” an issue that has played a central role in the administration’s agenda.

Silver, in his prepared testimony, argues that the bankruptcy is a reminder of the massive investments that China is making in clean energy – investments that have put U.S. companies at a competitive disadvantage.

“But no country has been as aggressive as China, which last year, alone, provided more than $30 billion in credit to the country’s largest solar manufacturers through the government-controlled China Development Bank,” Silver says. “That’s roughly 20 times larger than America’s investment in the same time period.”

Silver warned against using the Solyndra incident to cut funding for clean energy programs.

“While we are all disappointed in the outcome, securing America’s leadership in this vital new industry requires that we support innovation and deployment,” Silver says. “Solyndra’s situation should not overshadow the great work that the Department’s loan programs have done to date, or the need to continue to find ways to support clean energy in this country.”

Later in his prepared testimony, Silver attempts to counter Republican claims that the Obama administration is “picking winners and losers” by providing financing opportunities and other incentives for low-carbon energy course.

“And one of the most important tools – as our global competitors have learned – is low-cost financing, wisely targeted and responsibly deployed,” Silver says. “This isn’t picking ‘winners’ and ‘losers’ – it is helping ensure that we have winners here at all. We invented this technology, and we should produce it here.”

Silver will be joined at Wednesday’s hearing by Jeffrey Zients, deputy director of the White House Office of Management and Budget.

Another Energy Department official, Deputy Secretary Daniel Poneman, is defending the Obama administration’s loan guarantee program in the press.

The Solyndra bankruptcy, he says in an op-ed set to be published in USA Today on Wednesday, was the result of a “perfect storm of deteriorating market conditions.”

The company first applied for a loan guarantee in 2006, under the Bush administration, Poneman notes. And the application “underwent years of rigorous internal and external review before being approved.”

Like Silver, Poneman argues that policymakers need to increase the investments in clean energy.

“Government support has an important role to play in developing new industries and emerging technologies, where private financing is not sufficiently available to support investment at commercial scale,” Poneman wrote.

“When it comes to clean energy, we have a choice to make. We can compete in the global marketplace — creating American jobs and selling American products — or we can buy the technologies of tomorrow from abroad.

Solyndra announced in late August that it would suspend manufacturing, lay off 1,100 employees and file for bankruptcy.

The California-based company received a $535 million stimulus loan guarantee from the Energy Department in 2009 to help finance the construction of a new plant to manufacture solar panels.

Republicans launched an investigation into the Obama administration’s decision to grant the loan guarantee earlier this year after Solyndra encountered a number of financial setbacks.

Solyndra announced last year that it would close a plant, lay off employees and delay the expansion of its newest facility. It also canceled plans to go public.

This story was updated at 9:04 a.m. on Sept. 14.