The DOE’s $40 Billion Loan Program & Its Effect on Solar Energy

In early 2021, U.S. Energy Secretary Jennifer Granholm named Generate Capital’s President Jigar Shaw the head of the Loan Programs Office. Jigar Shaw, a pioneer in the clean energy market, brings ample experience and creative problem solving to the Department of Energy as the Biden Administration attempts to revitalize the office. In the Loan program’s infancy, the funds helped launch the first utility scale solar & wind farms in the country. The most famous example of the loan program’s successes is through some of the initial funds dedicated to Tesla, America’s #1 EV Company while the fund has also had high profile failures, one being Solyndra, a failed solar company based in California. Even so, according to the DOE, the government & taxpayers have netted more money from loan guarantee interest payments than what has been distributed as loans, thus providing a net positive for all Americans. March 2021, U.S. Energy Secretary Jennifer Granholm named Generate Capital’s President Jigar Shaw the head of the Loan Programs Office.  Shaw, a pioneer in the clean energy market, brings ample experience and creative problem solving to the Department of Energy as the Biden Administration attempts to revitalize the office. In the Loan program’s infancy, the funds helped launch the first utility scale solar & wind farms in the US. The most popular example of the loan program’s successes is through the funding of Tesla, America’s #1 EV Company.  The fund has also had high profile failures, one being Solyndra, a failed solar manufacturer based in California. Even so, according to the DOE, the government & taxpayers have netted more money from loan guarantee interest payments than what has been distributed as loans, thus providing a net positive to all Americans.

In addition to the loan interest payments, one of the largest value adds of the DOE Loans program has been improving the bankability of emerging technologies like utility scale solar. Prior to these loans, many institutional investors were too risk-averse to capitalize  these technologies. Now, utility scale solar & wind farms are considered some of the most bankable energy investments o be made.

Under the Biden Administration with Granholm & Shaw leading the charge, there are plans for up to $40 billion in available loan guarantees being made available for existing clean energy technologies like solar, hydro, wind & nuclear, as well as emerging technologies like EV charging infrastructure, energy storage, and efficiency. The deployment of these funds aligns directly with President Biden’s broader goals of fast-tracking America’s shift to a clean energy economy.

Shaw is planning on utilizing his techniques developed at Generate Capital to ensure that much of the funds are dedicated to smaller earlier-stage companies and reducing the average loan amount so that there are more opportunities for wide-scale deployment of these loans.

How Will the DOE’s Loan Program Affect SCF?

SCF doesn’t expect any direct impact from the revitalization of the DOE’s Loan Programs Office, but rather indirectly through the emerging technologies that are being introduced to SCF’s new financing solution options such as Solar+Storage PPAs & integrating EV Charging Stations into our solutions. Through utilizing these funds, SCF expects to see more opportunities to deploy these new technologies into our PPA offerings so that we can better service a broader range of comprehensive energy solutions for commercial-scale customers.