The U.S. Department of Energy said it plans to push ahead with as much as $5.3 billion in potential additional alternative energy loans by Friday, despite Republican complaints the money is going out too quickly to untested firms.
That comes against a backdrop of increasing political controversy overthe ill-fated loan recipient Solyndra, the company whose bankruptcy has prompted questions of who inside the Obama Administration knew of the company’s weak financial position and why they continued to pour taxpayer money into it.
The DOE has made seven conditional commitments for additional funding by the time the loan guarantee legally expires on Sept. 30. So far, it has made 23 loans totaling $11.2 billion, said a spokesman.
"We are committed to ensuring that every deal closed before Sept. 30 is fully vetted and will not close any deal that has not received full due diligence by September 30,” said Damien LaVera, a department spokesman.
“We are not rushing to complete deals, we are using the full amount of time Congress allocated for the program so we can ensure that we fully complete all due diligence and make informed decisions based on the most recent data.”
LaVera declined to specify how many companies would get the new loans, or name them, citing potential market impact.
But Republican Rep. Cliff Stearns of Florida, chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations, said Wednesday he’s worried DOE is rushing the loans out the door with too little oversight.
“The administration's flagship project Solyndra is bankrupt and being investigated by the FBI, the promised jobs never materialized, and now DOE is preparing to rush out nearly $5 billion in loans in the final 48 hours before stimulus funds expire. That's nearly $105 million every hour that must be finalized until the deadline,” Stearns said.
“Solyndra was the product of a bad bet rushed out the door and taxpayers are now on the hook," he added. "We cannot afford DOE rushing out more Solyndras in these final hours.”
Meanwhile, industry analysts said the controversy over Solyndra is causing a drag on the entire solar sector, even though other companies may not have made the same missteps as Solyndra.
“It’s a black eye on the industry,” said Jefferies clean technology analyst Jesse Pichel. “Its definitely weighed on investor sentiment.”
Pichel said his concern now is that “good solar projects are not getting done” because of the political fallout from the Solyndra bankruptcy.
But he said that’s not why he’s advising investors to stay away from the solar sector. Instead of the political scandal, he said, the real problem for solar is the overall economy.
“A solar panel is a piece of equipment that lasts for 25 years, and that inherently needs financing at a time when the financing situation is weak,” he said. “Installation of solar panels in houses is affected by consumer sentiment at a time when consumer sentiment is weak.”