NCPA - National Center for Policy Analysis

Red Flags for Green Energy

October 19, 2011

While the public eye has remained fixed on the case of Solyndra as the key example of poor spending priorities in the 2009 American Recovery and Reinvestment Act (ARRA), the fact remains that numerous other U.S.-backed energy programs are also on financially dubious footing.  Within the state of California, which received $4.6 billion in funding for energy initiatives, several programs have reported results that bear striking resemblance to the sluggish economy: lack of profits, unexpected delays and inexplicably negative results.  While there are some successes in the mix, these failed or failing programs seem to outweigh the successes, says the Wall Street Journal.


  • The U.S. Energy Department distributed $35.2 billion in funds for energy initiatives as a part of ARRA.
  • Solyndra, which received $535 million in funding from the federal government, declared bankruptcy in August and is now undergoing a criminal investigation for potential fraud.
  • Additionally, $15 million in funding went to a program to train workers in new skills such as solar panel installation, yet 62 percent of the program's graduates remain unemployed.
  • A program to install efficiency-saving improvements in residential homes, which was given $185.8 million, has been delayed by a lack of government advising while a similar initiative that received $113 million has improved only 6,342 buildings out of its goal of 15,000.

The prevalence of these lackluster performances by U.S.-funded enterprises does not mean that the energy initiatives of the stimulus package have been without success stories.  BrightSource Energy, the recipient of a $1.6 billion loan guarantee, is expected to double thermal and solar energy production in the United States and has created 1,400 jobs.  However, the number of failed initiatives, several of which emphasize a lack of government guidelines as a large factor in their subpar performance, lays the ground for further disappointing results in the near future.

Source: Vauhini Vara, "Red Flags for Green Energy," Wall Street Journal, October 12, 2011.

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