Energy Department officials had vowed earlier this year to create or save more than 65,000 American jobs once its 42 projects were financed and complete. They say the program is now “on pace” to create or save roughly 60,000 jobs. (It shaved roughly 5,000 from the target after two companies turned down the department’s offer of help.) The department adds that its projects have helped generate 7,391 temporary construction jobs.
“This does not include tens of thousands of indirect jobs these projects create up and down the supply chain, or the countless additional jobs that depend on America staying competitive with countries like China in the clean-energy race,” department spokesman Damien LaVera said.
Renewable-energy firms say many other workers and companies have prospered by being part of the supply chain. BrightSource Energy, for example, a developer of utility-scale solar-power projects, is the recipient of a $1.6 billion loan guarantee, the second-biggest awarded so far; it says it has purchased goods in 17 states.
Still, agency projections indicate that creating jobs is a laborious process. If the 20 companies that have won loans so far deliver all the new jobs they have promised, they will hire a total of 8,050 new workers for permanent positions. Half of those 20 companies have neither created nor saved any permanent jobs yet; several won their loans only recently. Even the BrightSource project, which employs 700 construction workers now, will employ only 86 people on a permanent basis.
Obama administration officials say the jobs are high-quality and will improve the economy’s productivity. In addition to the loan guarantee program, the Obama administration has targeted “green jobs” through cash grants for wind farms and weatherization grants to state agencies.
Muro said administration-supported projects “that may have been honorable investments in technology were sold as short-term job creators for political reasons,” he said. “Exaggerated expectations about jobs were set.”
The eventual cost of the loan guarantee program for taxpayers remains unclear. If the revised 60,000 target is reached, it would work out to about $640,000 in loan guarantees for every job created or saved. These financing guarantees were approved by Congress as part of the American Recovery and Reinvestment Act.
If the companies do well, they won’t need to draw on the guarantees and won’t cost the government anything. But if the companies go bankrupt, as Solyndra did, taxpayers will be on the hook. Moreover, the Treasury Department’s Federal Financing Bank has been directly lending — at extremely low, subsidized rates — to companies that win Energy Department guarantees. Congress and the administration assumed a failure rate of 5 to 10 percent for the program. Solyndra represents about 3 percent of the loan guarantees made so far.
Solyndra received the Energy Department’s backing and also a federal bank loan — at rates as low as 1.025 percent. It’s unclear how much, if anything, the government can recover in bankruptcy proceedings, but it can pursue claims as a creditor.
Solyndra’s closure prompted concerns about whether the administration made good bets in the rest of its portfolio of clean-tech projects it had helped subsidize with taxpayer-guaranteed loans. The primary investors in Solyndra were funds tied to a major Obama fundraising bundler, Tulsa oilman George Kaiser.
Although the financing of renewable-energy projects was never an ideal way to create jobs, the 2009 stimulus package gave Obama a way to get Congress to appropriate more money for renewable energy than it would have provided otherwise.
In addition to guaranteeing loans for renewable-energy projects, the Energy Department has been meting out grants from a separate, less-controversial $33.7 billion appropriation it received as part of the 2009 economic stimulus bill. So far, the department has given out $18.1 billion from that fund, ranging from $44,295 to a Swarthmore College science program to about $1.5 billion to clean up waste at the government’s Savannah River nuclear site. Hundreds of millions have gone to companies trying to figure out cheaper ways to capture carbon dioxide from coal plants, a priority for coal-state lawmakers.