Renewable Energy and Government Subsidies Go Hand in Hand (for Now)

The Obama Administration is coming under fire for providing subsidies to renewable energy sources, such as solar, wind, and geothermal.

And not for the first time.

The latest tiff results from a $528 million loan to Solyndra LLC. Despite receiving federal funds, the private, California-based solar panel maker went belly up on Sept. 1, filed Chapter 11 bankruptcy protection, and laid off every one of its more than 1,100 workers.

U.S. Secretary of Energy Steven Chu has gotten more political flak from the loan program in recent months. Political opponents claim it's an example of government waste in the making.

Since 2009, Washington has doled out some $16 billion in 28 loans. The Energy Department says this loan money has resulted in 60,000 jobs.

However, with $6 billion being committed in only the last few weeks (to beat a Sept. 30 budgetary deadline), disasters like Solyndra are something best avoided when Chu speaks on renewables.

Just as predictably, they are likely to figure prominently in the rhetoric coming from the other side.

But the current debate that the Solyndra failure has prompted brings a broad question: Can renewable energy sources make it in the market without a significant push from the government?

Not initially.

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Renewable Energy and Government Subsidies Go Hand in Hand (for Now)
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About the Author

Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.

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