How Republicans Plan To Use Their House Majority To Delay Climate Action
Republicans are getting ready to attack a clean energy program they invented back in 2005. Here's how it could slow down America's energy transition.
Most people outside of Washington D.C. wouldn’t recognize Cathy McMorris Rodgers name. In her 18 years as a Congresswoman representing a rural district of Washington state, she’s rarely made national headlines. Compared to firebrands like Majorie Taylor Greene, Rodgers is calm and measured. Which is why in August, shortly after the Senate passed their historic climate bill, very few people noticed a video Rodgers posted to Twitter.
Set against a blurry Zoom-style background, Rodgers called the Inflation Reduction Act a “war on reliable and affordable energy.” Like many other Republicans, she falsely claimed that it would increase energy prices. Then about halfway through the video, she said something she would go on to repeat dozens of times over the next few months.
“We need to remember the Solyndra scandal,” she said, referring to the solar company that received a $535 million loan from the Energy Department in 2009 then went bankrupt two years later. “This bill pumps $250 billion of loan authority into a similar type of loan guarantee program. It’s Solyndra on steroids.”
Rodgers has gone on to repeat those three words—Solyndra on steroids—in every national press interview she’s given since August. But this catchy line isn’t just political rhetoric; it’s a preview of what’s to come over the next two years. It’s a roadmap that describes how Republicans plan to stall a signature piece of the Biden administration’s climate plan and slow America’s transition to clean energy.
The Solyndra scandal explained
In 2005, Chris Gronet began spending much of his time at the National Renewable Energy Laboratory (NREL) in Golden, Colorado. As an entrepreneur from Silicon Valley, he saw an opportunity to take cutting-edge research from the government-funded lab and bring it to market.
He was particularly interested in a technology NREL was working on that could revolutionize the solar industry. Then, as now, most manufacturers used silicon to make solar panels. Researchers at NREL were experimenting with ways to make solar panels from other materials like copper, indium, gallium and selenium, known as CIGS.
“He wanted to do a startup, and he asked us, ‘Can you guys show me what CIGS is about?’” Rommel Noufi, a solar scientist at NREL, told The Mercury News in 2011.
One reason manufacturers weren’t using CIGS to make solar panels was their sensitivity to moisture. But after a few trips to NREL, Gronet came up with a solution to this problem. Rather than making flat solar panels that could be ruined by rain and other elements, he designed a system that put the CIGS in air-sealed tubes. Compared to traditional solar panels, Gronet believed his invention would be more efficient at converting sun rays into electricity and more weather-resistant.
In 2005, Gronet incorporated his company as Gronet Technologies. The following year he rebranded it to Solyndra.
Almost immediately Solyndra was a darling of the burgeoning clean energy industry. In 2007, the company raised $99 million from investors. The following year, Richard Branson’s investment fund put in money. By the end of 2008, Solyndra had raised $600 million. That year, the company announced it had secured contracts with customers worth more than a billion dollars.
In 2009, the company received a $535 million loan guarantee from the Department of Energy to build a factory that planned to employ 3,000 people. Then-vice-president Biden announced the deal at the company’s headquarters. A year later, Obama toured the factory during construction.
Less than 18 months later, Solyndra filed for bankruptcy.
Anyone who watched cable news or read a newspaper in 2011 knows what happened next. Conservative media outlets like Fox News framed the bankruptcy as the scandal of the century. Republicans used their House majority to launch an investigation. In a series of five hearings, Republicans grilled Department of Energy officials.
Conservative media and Republican leaders framed Solyndra as the FTX of 2011, a story of fraud and political corruption. The truth was far more boring.
Solyndra offered an alternative to silicon solar panels. In 2008, when they raised hundreds of millions of dollars and secured more than a billion dollars in revenue, the price of polysilicon hovered around $400 per kilogram. Those high prices enabled Solyndra to compete and undercut their competitors. Within a year, the price of silicon collapsed to $40 per kilogram. The company lost its competitive edge and any chances of survival.
“Solyndra’s failure on its own is not remarkable. There are always risks involved when you’re introducing innovation into a commoditized market,” wrote TechCrunch’s Sarah Perez following the company’s collapse.
In their attacks on the Department of Energy’s loan program that gave Solyndra money, Republicans left out an important piece of context: The entire purpose of the program was to take risky bets and occasionally lose money.
Bridging the “Valley of Death”
The idea to create a Loan Programs Office (LPO) in the Department of Energy was initially a Republican idea. Senator Pete Domenici (R-NM) included it in the Energy Policy Act that President Bush signed in 2005. But the program was supercharged in 2009 when the Obama administration gave the LPO $35 billion in lending authority as a part of the Recovery Act.
The program aimed to solve a problem that has long plagued innovation in America. All across the country, government-funded labs like NREL invent breakthrough technologies. But very little of that technology makes it out of the lab and into the real world. One reason for this is what technologists and investors call the “Valley of Death.”
On one end of the valley, you have the federal government, which spends billions on early-stage research and development (R&D). Gronet, the founder of Solyndra, found some of that R&D at NREL in 2005. On the other end of the valley, you have private investors who invest billions in late-stage, proven technologies. But almost no one puts up money for the technologies that fall in the middle of the valley, the stuff that’s promising, but not quite guaranteed.
That’s the problem that the LPO was created to fix. And it proved remarkably effective at helping companies get through the valley.
In 2010, shortly after Solyndra received their loan, another startup in Silicon Valley found themselves in the Valley of Death at an especially unfortunate time. The company’s founder, an awkward engineer from South Africa, spent much of 2009 trying to raise money for his electric vehicle company. At the time, his company was burning millions of dollars every month. To reach profitability it would need to invest hundreds of millions in a new factory that could manufacture its first mass-market car. No private investors were willing to take the gamble on something as risky as electric vehicles, bringing the company to the brink of collapse. Then the LPO came to the rescue with a $465 million loan. 12 years later, the company, Tesla Motors, was the most valuable car company in the world.
Electric vehicles aren’t the only technology that the LPO helped get through the Valley of Death. In 2011, utility-scale solar and wind markets in America were woefully behind markets in Spain and Germany. At the time, banks weren’t willing to loan the large amounts of capital necessary to build huge clean energy farms.
The LPO provided billions of dollars in loans to finance the first five utility-scale solar projects in America. They also provided a loan to Shepherds Flat Wind Farm, which was one of the largest wind farms in the world when it started generating power in 2012.
Those clean energy projects have been a huge windfall for American taxpayers. None of the wind or solar farms that the LPO lent money to have missed an interest payment. The projects are expected to deliver $5 billion in interest to the Treasury Department, more than 10 times the amount of money lost in the Solyndra deal.
Jigar Shah, a former clean energy investor, currently runs the LPO. In an interview with Volts last year, he said, “The program adds about $500 million of interest payments per year to the US Treasury — so we make money for the government.”
In fact, the LPO’s failure rate—that is, the percentage of loans that go south like Solyndra—is lower than the average venture capital or bank’s lending portfolio according to Dan Reicher, a senior research scholar at Stanford University’s Woods Institute for Environment.
“The program was extremely successful. It catalyzed billions of dollars into the clean energy industry as a part of the 2009 stimulus,” said Jamal Raad, the executive director of Evergreen Action, a climate advocacy group based in Washington state.
The LPO can accelerate the energy transition
Today, the loan program is a key part of the Biden administration’s climate plan. When Congress passed the Inflation Reduction Act last year, they gave the LPO an additional $350 billion in lending capacity.
That money can be used to invest in everything from transmission infrastructure to geothermal power plants to electric semi trucks. That’s important considering that many of those technologies will need to cross the “Valley of Death” in order to displace existing fossil fuel technologies.
LPO loans can also be used to attract private capital. At an event in 2021, Shah said that total investment in climate solutions is currently at about $200 billion per year. In order to cut emissions by 50% by 2030, annual investment needs to reach $1 trillion per year.
But the scale of investment in the LPO and Biden’s support for the program has made it a key target for Republicans.
Republicans are looking for the next Solyndra
“Much like Solyndra, Republicans are going to want to take the political cudgel to the president and the climate movement,” said Raad.
I asked Raad, who helped craft many of the policies in the Inflation Reduction Act, how Republicans could use their new House majority to fight Biden’s climate plan.
“The power will really rest with committee chairs and subpoena power,” Raad said. Committee chairs like Rep. Cathy McMorris Rodgers will have the ability to hold hearings and capture the attention of the national press. Their goal is to find the next Solyndra and frame Biden’s climate bill as an example of government waste.
Rodgers has already begun her search. Last October, she sent a letter to Energy Secretary Jennifer Granholm about the loan program. In the letter, she wrote, “The scope and scale of this expanded loan authority raise questions about increased risks of waste, fraud and abuse, especially if the administration uses the program for its rush-to-green agenda.”
But Republicans don’t need to find another Solyndra to slow down the transition to clean energy. With subpoena powers, Rodgers and other Republican leaders will have the ability to waste a lot of the executive branch’s time.
“Every time you make some of the executive branch testify, that takes a lot of staff time and energy,” Raad said. That time comes at the expense of getting loans out the door and funding the next Tesla Motors. But it does more than just that.
“Staff time is a finite resource,” Raad said. He then rattled off a list of regulations the Biden administration needs to finalize in order to meet its goal of reducing carbon emissions by 50% by 2030. Many of those regulations would hurt the fossil fuel companies that helped elect Rodgers.
Rodgers received nearly $600,000 from energy and natural resource companies in the 2022 election cycle, the second most of any House Republican. She can return the favor to her donors by issuing subpoenas, holding hearings, and otherwise distracting executive branch officials from writing new regulations.
“She’s taken significant sums of money from the fossil fuel industry and will work on their behalf,” Raad said.
In this way, Republicans can continue their decades-long effort to block climate action and protect their fossil fuel donors, even if it means attacking a profitable program they invented back in 2005.
In the meantime, Raad and other climate activists plan to fight back. “We know the facts are on our side, but that's not enough.” he said. “There are going to be competing stories that say clean energy is a waste of money. We need to combat that by telling our own stories.”
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