• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Solar Power on the Taxpayers' Dime

    Someone should really tell the Department of Energy (DOE) about the federal government’s spending crisis.

    On Monday, it granted a $2.1 billion loan guarantee to a German developer to help finance a 1,000 megawatt solar thermal power plant in Southern California. But wait, there’s more.

    Add to that a $1.6 billion loan guarantee for another plant in California’s Mojave Desert, a $1.2 billion loan guarantee for one in San Luis Obispo County, Calif., and $967 million for a location in Arizona, all since February, according to a Forbes.com report. That’s nearly $6 billion in taxpayer dollars to back up private industry’s green energy ventures.

    But that’s just the tip of the iceberg.

    According to The Heritage Foundation’s Nicolas Loris, the DOE is one of the fastest growing federal agencies with a budget that grew from $15 billion in FY 2000 to $26.4 billion in FY 2010—a staggering 76 percent increase in only one decade.

    Loris has identified $6 billion in possible cuts, among them, $3.2 billion for the Office of Energy Efficiency and Renewable Energy, which is tasked with funding the research and development of “clean energy technologies” — commercializing technologies, not promoting research. Loris writes:

    It is neither the DOE’s responsibility nor the role of government to make projects cost-competitive. The company that can make biofuels or any of these other alternative technologies cost-effective and environmentally efficient will reap the rewards for doing so with high profits. Increased competition will directly benefit the consumer, and the DOE should not artificially prop up these technologies and energy sources.

    It’s not news that the White House is dedicated to promoting alternative sources of energy as part of its green agenda. But government has a role, and its job is not to undertake tasks better left to the private sector. And that’s especially true in a time when government spending must be contracted, not expanded.

    Posted in Ongoing Priorities [slideshow_deploy]

    16 Responses to Solar Power on the Taxpayers' Dime

    1. Stan Doore, Silver S says:

      It would be better to place solar collectors on and storage in homes rather than use large open spaces for solar energy collectors and long transmission lines. This would place the collectors nearer to the user and reduce line loss.

      There is plenty of unused surface roof area on residences. Use it. The electricity could be used in the home too. Think of it as a system.

      As electric vehicles like the Pruis, Volt, etc. come onto the market, the home would be a great recharge station using solar energy.

      Regards, Stan Doore

    2. Bill, Charleston WV says:

      Is it any coincidence that these projects are being done in California where legislation just passed that mandates 30% of energy comes from renewable sources? Why should the rest of the US finance this continually irresponsible state? If the DOE didn't give these loans the whole green movement in California would either collapse or the rest of the population would emigrate.

    3. David Bibeault, Smit says:

      Did the company executives donate to the Obama campaign?

    4. Wm Craig Barnard says:

      Mr. Obama says he wants America to be energy independent and to use alternative fuels or sources. That is agreable when appropriate practices are followed in a capitilist free market society.

      The recent grant to a GERMAN company who wishes to build a 1,000 megawatt plant is absuerd. How does giving a grant to a foreign interest to build and operate the solar plant make the US independent of foreign countries and companies.

      The fact is American companies will not make major investments in these technologies and the president is forcing the issue. He refuses to let the free markets work to drive technology innovation that would bring the price down. Rather Mr. Obama lets his energy department fund these early efforts. These investments make the math work at great cost to Americans.

      Here is the issue. Lets say you wish to build a house and it cost $300,000. The market will not support the purchase of the house because of the cost. With this problem you go to the government to seek a grant for 1/2 the cost of the house. The government >>To Help You Business<< Grants you $150,000. You now can market your $300,000 house for $200,000 (which the market will support and buy at the lower price. You not only make profit off the sale of the house) but make even more profit from the free grant. Basically the builder of the house has taken money out of his friends and neighbors pockets.

      The above is exactly what the German company is doing to Americans. They are defering their costs thus making their project viable. It would not have been other wise. This along with increased energy costs being driven up by government policy enable projects like this to operate. The question is when Mr. Obama is no longer in office and the country moves back to mining it oil and gas reserves again thus lowering cost and dependence will the 1,000 Megawatt german plant ve viable. Probably not.

      It would be nice to know what these billions of dollars will do for America. How many homes would be served by a 1000 megewatt facility. How much of an effect would it have on the reduction on oil, gas and coal.

      America has a security interest in becoming energy independent. Should the government be taking tax payer money to fund these activities. No. If the technology is sound and has been worked out so that it is commercially viable then private industry with Trillions of dollars sitting on the side lines should be the investor. The private sector free markets should be encouraged to develop faster and government growth and involvement restrained.

      With a need to transition into energy independence it may becomenecessary to make the transition pay for existing energy companies that provide our energy now. Exxon Mobil, Chevron Texaco and other companies who provide our oil and gas now may need incentives to help with the transition as well as benefit from it's growth and development.

      It may be necessary for Government to take an action to press forward the national security interests of America and negotiate with existing energy companies. A special excise tax on the product they sell of 3 to 5% (just and example) to go directly to the development and expansion of proven alternative energy sources like solar farms may be acceptible IF the energy companies can also benefit from the investments made with their money. It may be necessary to include the oil companies in the granting process and no foreign company should receive these grants. However one must ask, how do we become energy independent with foreign ownership.

      It is governments place to encourage benefits to the nations business operators and the public; and perhaps it could be said that government should be looking for ways to constructively build bridges between competitive interests.

      Thank you.

      Wm. Craig Barnard

    5. George Fuller, Saras says:

      How can you grow an economy that runs on cheap energy by substring outlandishly expensive alternatives……

      Spain did it big time…….current unemployment…….20%

      All in the name of sustainability

    6. Leon Lundquist, Dura says:

      Department of Energy should be defunded and abolished, for its complicity in the destruction of (and Attempt) the American Energy Industry. I don't get it how this crazy redundant layer of Government should be allowed, no worse, directed to wreck American Energy? Oh sure! "Oh! We need a national Energy Policy!" Yeah, like a few million dollars worth of work? Now you guys at Energy think you are the Kings of the World! Hey! America doesn't need you! And if Democrats could ever take their head out, even they wouldn't want Gray Crony Capitalism!

      Honest to Pete! The Department of Energy is a Minus, not a value added thing, this is spending Billions of tax dollars to lose Trillions of National Net Worth! God love the Republicans! We could save Trillions by just getting rid of the damage, prospectively, of the Department Of Energy doing this High Crime on American Citizens. Well sure! Rich Americans are deserving of equal protection! Aren't they? Energy doesn't 'necessarily' skyrocket! It is totally unnecessary! I am calling it! The Department of Energy is promoting High Crime! It deserves to be defunded and abolished! Replace it with something small and incorruptable. Why? It is a Dictatorship! That is an Unconstitutional Form of Government, see? Even if Obama does it!

    7. Tom, Okinawa, Japan says:

      Why is it we always seem to spend money helping foreign developers. Why not use American companies? Don't we need the jobs? Look how much was given to Brazil for oil development. How many other countries are getting funds that could be going to American companies located in America? Obama really mustn't want America to develop jobs for its citizens, rather give the jobs to foreign countries..

    8. Pete, Houston Texas says:

      If a German company has such a great idea, then the German government can fund/backstop finance it. The power can then be sold into the grid at the current market rates. If the technology and costs are competitive then it should be a good solid investment. If not, then the Germans government will get stuck wtih the bill and a US company can buy it at the correct market price and then put power back on the grid at a price that is competitive. Sounds like another Obama sound bite in which the spanish are putting together wind turbines in pennsylvania.

    9. theo lowe says:

      Where is the power plant that isn't financed on the taxpayer's dime? Is the problem that it's not nuclear – 'cause we sure pay for that. Is the problem that it's not coal – 'cause we pay for that too. Wait, maybe it should be oil or gas 'cause we don't pay for that – oh I misspoke, we pay for that as well. Surely you're not stating that we don't pay for mining or oil.

      Which one of these companies is really American? Maybe the beef should be that we don't have a comprehensive national energy policy and everything seems to be a series of increasingly knee jerk reactions. I'm tired of subsidizing…

      As a taxpayer (and payer and payer) I have to ask – what today is not billed to the us in some way? Energy depletion allowances, liability waivers, unsafe practices and technologies resulting in leaks, pollution, superfund sites, etc. What don't we pay for?

      Why don't we lead again through innovation? All of the above is so 20th century! I suggest the DOE should seed development of the next clean power technology by offering a major bonus to the US company that perfects a real viable solution to the world's ever increasing appetite for power. Let's license that to the rest of the world for a return on our investment.

    10. Wes in cincy says:

      Obama simply does not care about what the average American thinks or wants.

      He is so blinded by his Columbia University Socialism that he is going to do what he wants to do whether we like it or not. But if you think this guy is acting like a South American dictator you haven't seen anything yet. If he gets re-elected he will be 10 times worse and our beloved country is toast.

    11. Roger, Boise Idaho says:

      Nicolas Loris could only identify $6 billion in possible cuts??? I can do better than that- how about $26.4 billion in not possible, but NEEDED cuts!

    12. Pingback: PA Pundits - International

    13. Ben says:

      Stan, rooftop photovoltaics are even worse than solar thermal. The line loss is trivial compared to the reduced efficiency of the ineffective generation technologuy. With enough development (either to increase efficiency or reduce installation cost), the generation on every rooftop may be feasible. However, I am not holding my breath. Right now, it is wasteful and both economically and environmentally unfriendly to install rooftop solar.

    14. Jeff, Washington, DC says:

      American Companies need to step up.. Alternative energy is where we need to go… or… should we finance another weapon system and subsidize the defense industry? Which provides for a longer-term security option? I would dare say clean energy independence. You can grouse about a German company getting the loan guarantee… shame on our American Capitalists for not seeking out that opportunity versus building another weapon system designed to take down a small army at a time… wake up… it is only your kids future you are talking about… perhaps oxygen respirators will be in vogue soon with all the air quality

    15. Bobbie says:



    16. Fran says:

      If these are loans, Does anyone know what the terms of these loans are? Do they pay it back at a decent rate of interest? Or is this a no interest if paid back within 20 years? Who is negotiating these loans.
      I don't like the idea of financing energy farms or other companies who will charge the taxpayer for the use of the energy created. If the taxpayer is financing the company it should own it!

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.