Real Promise or False Hope: DOE's Title XVII Loan Guarantee

DOE FY 2010 Budget Request and Recovery Act Funding for Energy Research, Development, Demonstration, and Deployment: Analysis and Recommendations

“…In February 2009 Secretary Chu announced a series of reforms to make the loan guarantee program faster and more efficient, including offering the option to firms of paying the subsidy costs over the life of the loan, rather than at or before closing on the loan (DOE 2009h) (whether it will be implemented on a case-by-case basis, apply to all applicants with certain characteristics, or apply to all applicants is yet to be determined (Massouh et al 2009)). Massouh et al (2009) have argued that the current process focuses heavily "on the bankability of the applicants' projects and the creditworthiness of the applicants themselves," which fails to take into account the characteristics of some potential applicants, like start-up technology companies which may have no commercially proven revenue streams. The Recovery Act appropriated $6 billion to allow DOE rather than borrowers to cover subsidy costs for some projects, with a focus on renewable energy projects, electric power transmission systems, and innovative biofuels projects.…”