Republican presidential candidate Mitt Romney was once a venture capitalist. So when he became governor of Massachusetts, he recognized the need to set up a Green Energy Fund (!) in his state to “to provide equity capital, loans and management assistance to Massachusetts-based renewable energy businesses.”
Today, with continued state-level support, Massachusetts is a leader in cleantech venture capital — competing with Silicon Valley in biotech, renewable energy, and efficiency investments.
But now, in his bid to join the Solyndra scare-mongers in the GOP fringe, Romney is claiming the federal loan guarantee program that helped leverage tens of billions in private capital will cause investments to “disappear.” In an interview with Charlie Rose earlier this week, Romney said the program “kills solar energy.”
When the president says, “I’m going to … put a half-billion dollars into my favorite solar energy company, Solyndra,” let’s pretend for a moment that it didn’t go bankrupt. Let’s just pretend it was successful. Here’s what he doesn’t understand. There are well over 100 different businesses, I’ll bet, in this country that are trying to develop new solar technology. When he picks one that the government gets behind with $500 million, the investments in all the others disappear, because no one wants to compete with the government.
He kills solar energy by having the government play the role of venture capitalist. You either believe in free enterprise and freedom and the American system or you believe in the European government-dominated system, and that system is a failed system.
That must be why, in spite of the loan guarantee program that helped many “first-of-a-kind” solar projects get off the ground, General Electric is building a 400-MW thin film solar manufacturing facility in Colorado on its own. Or why companies like Google are throwing tens of millions of dollars behind solar projects throughout the U.S., helping accelerate the solar market into another record year.
Yep. That loan guarantee program sure did kill solar investments.
There are a number of legitimate criticisms that can be made about the loan guarantee program — particularly regarding transparency of the decision making process. But experience over the last year shows us that the program (which, it should be noted, is over and done with) did not force investments to “disappear.”
In fact, after raising hundreds of millions of dollars from the capital markets in preparation for the largest residential solar project in history, SolarCity lost its bid for a loan guarantee post-Solyndra. But rather than drop the investment, the company was able to secure $1 billion from Bank of America in order to move the project. SolarCity’s Lyndon Rive said the investment wouldn’t have happened without the previous due diligence undertaken under the loan guarantee process.
“We’re extremely grateful to the Department of Energy’s Loan Programs Office, in addition to our partners, U.S. Renewables Group and BofA Merrill Lynch. Without this group, we would not have been able to make the economics of this project work.”
Romney, who has an MBA, constantly reminds us that he comes from the business world. But his BS in politics seems to be trumping that experience.