Energy Secretary Ernest Moniz defended the Department of Energy’s (DOE) loan programs Wednesday, saying the program’s successes are greatly underreported.
The loans and loan guarantees aim to encourage the development and commercialization of advanced energy technologies, like solar energy components and electric cars. But they’ve been scrutinized in recent years as some companies that have received them, including Solyndra Corp. and Fisker Automotive Inc. went bankrupt, causing DOE to lose some of its investments.
{mosads}“Of the $30 billion plus in play, there’s been a just slightly over 2 percent default rate,” Moniz said Wednesday at an event on energy innovation hosted by the Bipartisan Policy Center. DOE has only used 10 percent of the loan loss reserve fund that Congress appropriated, a statistic Moniz said is “even more telling.”
Moniz said DOE’s portfolio has been extremely strong.
“Sometimes the concern is, maybe, are we taking enough risk? Because these metrics are awfully good compared to a usual investment portfolio,” he asked.
DOE still has about $40 billion in budget authority that it can use for the program, in sectors such as renewable energy, energy efficiency, vehicles, nuclear power and fossil fuels, and Moniz said the agency will be “very aggressive” with its future investments.
While Moniz declared the program a success, he said future loans are likely to be treated differently. One change will be to shift toward co-investment, in which DOE could partner with private financiers for projects.
DOE also has established a risk committee of high-level officials to make determinations on loans.
“Whether it’s a success or not, we will have a pretty clearly understandable way as to how we evaluated the risk and decided to move forward with a particular program,” Moniz said of the committee.
Overall, he said “the good news doesn’t get reported as rapidly as the relatively few failures.”
Moniz added that some loans that have been labeled as failures have nonetheless accomplished DOE’s goal of getting promising technologies into production domestically.