Department of Energy approves two new grants amidst controversy

The Department of Energy approved two loan guarantees worth more than $1 billion for solar energy projects in Nevada and Arizona last Wednesday. This announcement comes two days before the expiration date of a program that is often cited as one of the wasteful government programs of the Obama administration's green energy program by critics of the administration, particularly Republicans.

The two loans – one for $737 million loan to Tonopah Solar Energy for a 110 megawatt solar tower on federal land in Nevada and an another $337 million loan to Mesquite Solar 1 to develop a 150 megawatt solar plant near Phoenix – come amidst a great deal of controversy over government loan programs, particularly those concerning green energy sources.

Tom Schatz, president of Citizens Against Government Waste, a Washington-based advocacy group, said in an interview with The Associated Press that the government has a track record of backing failing or risky ventures which, when these companies experience financial difficulties or bankruptcy, cost the taxpayer money.

In 2009, Solyndra, a solar energy utility, received a $535 million loan. Despite early signs of financial difficult and a series of warnings from various sources, the DOE was slow to action.

Nor is that the only instance of energy firms with federal loans struggling. Three geothermal energy firms are also struggling with financial difficulties. Nevada Geothermal, Raser Technologies and U.S. Geothermal received $98.5, $32.9, and $97 million, respectively.

All three companies have struggled to make a profit and produce their forecast amount of energy. Nevada Geothermal has never posted a profit, and U.S. Geothermal has not made a profit the past four years.

“Candidly, it might be time for the federal government to rethink the whole idea of loan programs,” said Schwartz.

According to President Obama in reference to recent loan difficulties, "There were going to be some companies that did not work out.”

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