With Republicans still gunning for the alternative energy loan program that backed Solyndra, the energy secretary went on the offensive on Thursday, sounding an alarm that America would fall behind other countries—especially China—without more incentives to develop renewable energy industries.
"We are in a fierce global race to capture this market," Energy Secretary Steven Chu told the House committee investigating the $535 million loan to failed solar firm Solyndra.
China, which has vaulted past the West to become the world's largest manufacturer of solar panels, is spending heavily to prevail in the energy-technology race. In the past year and a half it poured $34 billion in solar manufacturing alone and now dominates about half the sector's supply chain, Chu said. (DOE dished out $1.3 billion in loan guarantees to solar panel makers.)
"Countries like China are playing to win in the solar industry," Chu, a physicist and Nobel laureate, said. The administration's green energy efforts, he suggested, at least keep the U.S. in the global race to make clean energy.
The 38 other loan guarantee recipients in the program are expected to add 60,000 jobs and provide clean electricity to 3 million U.S. households, according to his testimony.
House Republicans were unswayed. In their grilling of Chu they charged that the program bets on unproven technologies with taxpayer dollars. The Solyndra loan, they said, reeks of political favoritism and incompetence—and they're hell-bent on keeping the "Solyndra affair burning," Politico reported.
Chu insisted the firm fell apart from unforeseen "deteriorating market conditions." Cheap Chinese panels and shrinking demand from some governments' subsidy cutbacks made it impossible for Solyndra to compete, he said, echoing the belief of some industry analysts.
Rep. Cliff Stearns (R-Fla.) called for the ouster of Chu for his handling of the loan. "I just think he has failed the test," he told reporters.
Global Investment in Renewables to Soar, China to Lead
There at least two claims made in Chu's testimony that even Stearns can't dispute, however—that money flowing into clean energy is poised to rise by "by hundreds of billions of dollars" and that China will be investing "aggressively."
Figures released Wednesday from Bloomberg New Energy Finance show that global investment in renewable power generation is expected to reach nearly $400 billion a year by 2020. That's double last year's investments and equal to the GDP of some wealthy countries.
Offshore wind projects and solar energy development are predicted to snag the most cash. China is forecast to spend $50 billion each year on projects by 2014—the most of any nation, including all of Europe combined.
The U.S. and Canada aren't expected to catch up to Chinese spending until 2020.
E.V. Maker Fisker Tries to Quell Critics; Better Place Lands Hundreds of Millions More
America's electric vehicles sector picked up some momentum this week, after being overshadowed by claims in recent weeks that the industry's less-competitive players are on the verge of getting squeezed out.
Fisker Automotive, the DOE-backed electric carmaker flagged by some as the next Solyndra, said Tuesday it's on track to meet its goal to build 15,000 Karma plug-in luxury sports cars in 2012. This despite the fact that it's only making 1,500 cars this year due to major setbacks on the production line—faulty electrical harnesses, headlights and damaged leather interiors due to a flood. (The firm also secured $58 million in V.C. investment, on top of the more than $700 million in private equity, plus federal loans and grants it has already obtained, Greentech Media reported.)
But not everyone is buying its production pledge, including A123 Systems, the firm that makes Fisker's batteries, according to a Reuters report. The company expects 7,000 Karmas in 2012—at most.
A123's caution makes sense, given recent events. After a drastic drop in 2011 orders from Fisker, A123 was forced to cut its fourth quarter and end-of-year revenues by $45 million last week.
Fisker's announcement this week was meant to bolster confidence in the California automaker. In the wake of Solyndra, it was smeared for taking $529 million in federal loans and then building its first car in a Finland factory. Both DOE and Fisker said no taxpayer money was spent overseas, and the scandal has more or less fizzled.
But Fisker's problems are not behind it.