Democrats' inflation bill quietly created green energy loan program critics warn could lead to next Solyndra
All the ingredients that led to Solyndra scandal are present in the inflation bill, Heritage Foundation expert Katie Tubb tells FOX Business
The Inflation Reduction Act (IRA), which President Biden signed into law last week, opens the door for hundreds of billions of dollars of taxpayer money to be spent on green energy loans with unspecified accountability measures.
The IRA "plusses up" three existing Department of Energy (DOE) loan-guarantee programs and creates a new one, which could cost taxpayers more than $300 billion not included in the bill's official price tag, according to Katie Tubb, a research fellow at the Center for Energy, Climate, and Environment at The Heritage Foundation. One of the DOE programs boosted under the bill was responsible for aiding Solyndra, a now-defunct solar panel maker.
"Basically, it was a lot of money that had to be spent and not a lot of time, a lot of political pressure building with the global warming narrative that President Obama was starting to build, and there was certainly a lot of political pressure with the recession," Tubb told FOX Business in an interview.
The DOE awarded Solyndra $535 million in loans shortly after former President Obama signed the American Recovery and Reinvestment Act of 2009, which created the loan program. Solyndra filed for bankruptcy in 2011, just two years after receiving the government loan, and a federal watchdog later concluded the company made misleading statements to receive the loan.
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President Biden signs the Inflation Reduction Act on Tuesday alongside Sen. Joe Manchin, D-W.Va., Senate Majority Leader Chuck Schumer, D-N.Y., and House Democratic leaders. (Demetrius Freeman/The Washington Post via Getty Images / Getty Images)
"To me, all of those ingredients are here in this situation," Tubb continued. "The timing to use [the IRA's] loan authority is between now and 2026. We're talking about hundreds of billions of dollars and a lot of political pressure. That does not sound like a recipe for success if you're concerned about taxpayer welfare."
"With these loan programs, there's always going to be that potential for failure," she added. "I would much rather that potential for failure reside in the private sector where people are investing their own money in weighing risks and benefits with their own money because that incentive structure is there to make better decisions."
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In addition, the bill earmarks $27 billion for the so-called Greenhouse Gas Reduction Fund, a new loan program that will be overseen by the Environmental Protection Agency and will set up a national green bank to fund green projects nationwide.
The fund grants $7 billion for zero-emissions technology, $12 billion for "general assistance" loans and $8 billion for low-income communities.
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"It's hard to imagine that money will do anything other than enrich a few people who have the word ‘solar’ or ‘wind’ or ‘alternative’ in their company name," Ben Lieberman, a senior fellow at the Competitive Enterprise Institute's Center for Energy and Environment, told FOX Business.
"It's hard to think of any alternative energy success story despite all the money and all the years," he continued. "I don't see any coming out of the Inflation Reduction Act."
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It remains unclear how the federal government will oversee the program and prevent abuse. An EPA spokesperson told FOX Business the EPA would soon share more details about how it planned to implement the IRA's provisions.
Former President Obama signed an economic relief package in 2009, creating a loan program which awarded defunct solar company Solyndra more than $500 million. Drew Angerer/Bloomberg via Getty Images
"The reason why Solyndra is such a talking point is not just because of the $500 million that was lost, but the fact that there was absolutely no accountability," Daniel Turner, the executive director of Power the Future, told FOX Business in an interview.
"The taxpayers are always on the hook," Turner added. "That's what's going to happen with the green loans — we're going to give it to these quote unquote startups. Billions will be lost and we'll just talk about forgiveness, we'll never learn a lesson. The American people will continue to lose their hard-earned tax dollars."
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Turner added that green energy power sources are significantly less reliable than traditional fossil fuel alternatives. He pointed to Germany as an example of a nation that has pushed renewables.
"They're cowering before Vladimir Putin, their emissions are up, they're getting ready to turn coal plants back on," Turner said. "When does the good part of wind energy work?"