Bloomberg News

Chu Says Loan-Guarantee Program Could Be Better Designed

November 04, 2011

(Adds end date for loan-guarantee program in seventh paragraph.)

Nov. 3 (Bloomberg) -- The U.S. clean-energy loan guarantees that supported failed solar-panel maker Solyndra LLC could be improved, Energy Secretary Steven Chu said.

“We think we can design a program so that it could actually be self-pay and still stimulate the most innovative industries,” Chu said today at an event in Washington.

Some nations hedge their portfolios by charging higher interest rates to riskier projects, with the returns financing future ventures, Chu told reporters. He didn’t propose that the Energy Department pursue a different method of financing.

Solyndra, based in Fremont, California, received a $535 million guarantee in 2009 and filed for bankruptcy protection Sept. 6. The House Energy and Commerce Committee’s investigations panel has been investigating that award since February and voted today to subpoena White House internal communications from President Barack Obama’s administration.

Beacon Power Corp. of Tyngsboro, Massachusetts, an energy- storage provider that received a $43 million guarantee in August 2010, sought bankruptcy protection on Oct. 30.

“Not every company, not every product will succeed,” Chu said today at a conference hosted by the Washington Post. “But there’s no reason to sit on the sidelines and concede leadership in clean energy.”

The loan-guarantee program that provided backing for Solyndra and Beacon ended Sept. 30. Chu was discussing options for future clean-energy projects in his comments today.

The Energy Department’s program, which also included support for advanced-vehicle manufacturing and nuclear-energy energy technology, created about 60,000 direct jobs, Chu said.

--With assistance from Jim Snyder in Washington. Editors: Judy Pasternak, Steve Geimann

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net


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