Fact Checks

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  • FACT: The DOE loan guarantee program is an overwhelmingly successful program that played a critical role in the development of new renewable energy technologies by offering long-term capital when private financing was not available.

  • The Department of Energy Loan Guarantee Program has an approximately 97% success rate. As of late July, 2012, Solyndra, Abound Solar and the handful of other DOE-backed renewable energy companies that went bankrupt represented total investments of less than 3% of the entire DOE portfolio.  (Source: U.S. Department of Energy, April 2013, http://1.usa.gov/Nv1OeU)

  • It was well-known that the DOE's loan programs would include a measured amount of risk.  Before offering loan guarantees, Congress moved to protect taxpayers by appropriating nearly $10 billion to cover potential losses, acknowledging the risks of funding new technologies in industries that were facing significant market and economic challenges. (Source: Department of Energy, April 2013, http://1.usa.gov/10dWZIE)

  • Following reports of Fisker Automotive's financial difficulties, the Department of Energy acted decisively to protect the taxpayers' interest. In June 2011, the Department ceased making disbursements to Fisker after the company began to fall short of the milestones required in the loan agreement. (Source: Department of Energy, April 2013, http://1.usa.gov/10dWZIE)

  • There is no evidence to suggest that Fisker Automotive's loan was a political handout. Fisker was approached by the Bush administration about a potential loan in 2008. In early 2009, Fisker underwent a nine month-long review by DOE and several independent consulting firms to assess all aspects of Fisker's business plan, technology, and finances. In 2009 – nearly 4 years ago – their business was deemed sound. (Source: House Oversight Committee, April 2013, http://1.usa.gov/10dWgY6)
  • The Loan Guarantee Program (LGP) and Advanced Technology Vehicles Manufacturing (ATVM) loan program have many success stories. For example, as the American automobile industry fought to recover from the brink of collapse in 2008, DOE provided a $5.9 billion loan to Ford Motor Company to upgrade and modernize thirteen factories across six states. (Source: Department of Energy, April 2013, http://1.usa.gov/10dWZIE)
  • Another success story: In early March, 2013, Tesla Motors CEO Elon Musk announced that Tesla will pay off their $465 million federal loan in five years, rather than the 10 years specified in the loan. The company made its first payment of nearly $13 million in December 2012 and hopes to pay off the loan by 2017 – 5 years ahead of the 2022 deadline. (Source: Associated Press, February 2013, http://bit.ly/WpP4b1)
  • Loan guarantees have a long history in the United States, and have been used to support many of America's critical industries, including housing, transportation and agriculture. (Source: DBL Investors, September 2011, http://bit.ly/uV14lf)

  • The Loan Guarantee Program is not part of the Obama stimulus. The LGP was created in 2005 with bipartisan support under the George W. Bush administration and designed to provide government support for "innovative technologies." (Source: CNNMoney, June 2012, http://cnnmon.ie/LBryTy)
  • The Loan Guarantee program has received bipartisan support in Congress.  In 2010, House Oversight Committee Chairman Rep. Darrell Issa's (R-Calif.) wrote Energy Secretary Steven Chu to support an Energy Department loan for Aptera Motors Inc., a Carlsbad, California, electric-car maker, according to a letter received by the department Jan. 14, 2010. Aptera went out of business in 2011 due to lack of financing. (Source: Bloomberg, September 2011, http://bloom.bg/rehAzh)

  • According to Richard Stuebi, managing director at clean tech venture capital firm Early Stage Partners, a 30% success rate is required for a "successful VC investment strategy" in the renewable energy sector. The DOE Loan Guarantee Program greatly exceeds this. (Source: Clean Technica, October 2011, http://bit.ly/oFRkJN)

  • The attacks on clean energy companies are generally blown out of proportion. A Bloomberg Government analysis concluded that the "focus on Solyndra is not proportional to its impact." (Source: Bloomberg Government, December 2011, http://bit.ly/rCXgZP)

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