Paper: Analyzing the DOE Loan Program

The Solyndra bankruptcy has, not unexpectedly, resulted in a wide range of reactions. On one end we have “This was a horrible investment and waste of taxpayers’ money. We should shut down the whole program,” and on the other end “Every investment has risks, and if you want success on a big problem there will be some minor setbacks. This is totally healthy and expected.”

I found myself having conflicting reactions, with my rational side understanding the portfolio perspective, my business instinct telling me that Solyndra was a really bad investment, and my energy innovation advocate persona saying “That money could have doubled or tripled the size of ARPA-E for this year!”.

All of these reactions lead us to a set of important questions that no one seems to have addressed. Is Solyndra representative of the other investments in the portfolio? Can I feel bad about Solyndra but still be positive about the rest of the portfolio? Are loan guarantees really a useful tool in the federal energy innovation arsenal? These are important questions, as the program continues to be a topic of discussion in ongoing budget negotiations.

In the spirit of the Energy Innovation Tracker I have used publicly available information to analyze the DOE loan guarantee portfolio, and to get a handle on whether it is money well spent or not. I have captured this in a paper that is available in a number of forms: web page, Word file, and PDF.