Now that he's out of the Department of Energy and back in academia, former Energy Secretary Steven Chu is talking more openly about the controversial loan guarantee program that dominated the last two years of his tenure.
"I got much more personally involved" with the Solyndra and Fisker Automotive loans as the companies started getting into trouble, said Chu in an interview with the San Francisco Chronicle.
Chu said he made the decision to freeze the loan to Fisker, the struggling electric vehicle manufacturer currently on the verge of bankruptcy.
"You know why? Because in the end, I signed off on all the loans. So I got personally involved, more and more, on when to pull the plug and when not to pull the plug. Because it was on me," said Chu.
Chu oversaw an unprecedented expansion of clean energy programs at DOE through the stimulus. However, the loan guarantee program -- a support mechanism started by the George W. Bush administration -- dominated the second half of his tenure after a number of companies with loans failed or faced public struggles.
Chu was brought before Congress for a grueling five-and-a-half-hour hearing on the DOE's loan program, in which he combated accusations that the administration used the program to support political donors.
In his interview with the Chronicle, Chu hit back at critics.
"This is not widely appreciated, but Congress, with the renewable energy loan program, and the advanced [vehicle] manufacturing [program], they appropriated enough for $10 billion in losses -- $10 billion," he said. "We're not going to get to $10 billion. We might get to $2 billion. When Solyndra blew up, that was [a half billion]. You appropriate $10 billion, and you won't even tolerate a half a billion?"
Chu also said to expect "a few more bankruptcies" coming out of the program.
"We're going to have a few more bankruptcies. Sometimes it'll be like Solyndra where you get 3 cents on the dollar. Others, it'll be 80 cents, or something like that. If you look at what got started and what became bankable, was it successful? Yes. We were more successful than Wall Street. So come on, guys."
The loan program has been pilloried by critics for supporting numerous companies that failed or are in financial trouble. However, Tesla Motors recently repaid its entire $465 million loan guarantee, making it the first company to pay the government back in full.
The majority of projects supported by the loan guarantee program were power plants with agreements to sell electricity, making them far less risky than loans to companies like Solyndra, Fisker or A123 Systems developing capital-intensive technologies. Chu said the program made these projects bankable at a time when private investment was tight.
"It was proof of principle," he said. "Can you build a big solar farm, a big wind farm, and bring it in on time and on budget? After four years, the answer is yes. You've established you can do this. So, as Warren Buffett said, it's now bankable."
The program is now starting to show results. In the last quarter of 2012, the market for utility-scale solar grew 134 percent -- driven by large projects supported by the loan guarantee program.
In addition to talking about the loan guarantee program that came to dominate his time in office, Chu discussed President Obama's energy philosophy ("he's actually pretty moderate"), the potential for abundant fossil fuels to slow the cleantech transition ("it may slow up a little") and the need for utilities to change their ways ("I've been telling them there's another business model.")
You can read the full interview here.
Chu is now the second DOE official to speak more openly about the loan guarantee program after leaving office. Last week, Jonathan Silver, the former head of the loan program, broke his long silence about his role, saying that successes have "been obscured a bit by some of the politics."