Stalled Clean Energy Loan Program

Excerpt from an article in

The New York Times

Tuesday, March 13, 2012

Stalled Clean Energy Loan Program Feels Solyndra’s Chill

By BILL VLASIC and MATTHEW L. WALD

More than $16 billion in loans authorized five years ago by Congress to develop fuel-efficient vehicles has yet to be disbursed, with applicants for the money complaining that the Energy Department is crippling plans for greener cars and trucks at a time of rising gas prices.

Some companies contend that the loans, administered by energy officials, have dried up because of a political firestorm that followed the bankruptcy last year of the solar panel company Solyndra, which had received a federal loan from a related program. The bankruptcy fed Republican criticism of the Obama administration’s handling of clean energy loans because one of the investors in Solyndra was a major fund-raiser for the president.

“Since Solyndra became politicized last fall, the Department of Energy has failed to make any other loans,” said William Santana Li, chief executive of Carbon Motors, which on Wednesday dropped its $310 million application to build police cars with diesel engines that use 40 percent less fuel than current models.

Echoing other companies that were denied loans or have withdrawn their applications, Mr. Li said that in recent months federal officials had repeatedly altered the terms of the possible loans. Last month, Chrysler withdrew its application for $3.5 billion in loans — after three years of negotiations — because the government kept raising the amount of collateral required, company officials said.

“I don’t want any favors,” Sergio Marchionne, the Chrysler chief executive, said before the withdrawal. “I just don’t want to be mistreated.”

Energy Department officials declined to discuss specific loan requests because of confidentiality agreements, but they denied that the political fallout of Solyndra’s bankruptcy was an issue.

“It’s not unusual for terms to continually shift and change and evolve as a negotiation moves forward,” said Damien LaVera, a department spokesman. “It’s a constantly evolving process from the day they apply to the day they close their loans.”