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May 8, 2013

The Department of Energy Committed $11 Million Per Job

May 8, 2013
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Without much fanfare, the Department of Energy (DOE) recently updated the list of loan guarantee projects on its website. Unlike in 2008, when Barack Obama pledged to create 5 million jobs over 10 years by directing taxpayer funds toward renewable energy projects, there were no press conferences or stump speeches. But the data are nonetheless revealing: for the over $26 billion committed since 2009, DOE Section 1703 and 1705 loan guarantees have created only 2,298 permanent jobs – that’s $11.45 million per job.

DOE loan lossesAs the astronomical taxpayer exposure from the DOE’s loan guarantee program indicates, subsidizing renewable energy is not a good deal for taxpayers. But loan guarantees are just one of the ways the federal government bankrolls risky green energy projects. Energy-related tax preferences cost taxpayers about $13.5 billion in FY 2012, according to the Joint Committee on Taxation. But solar and wind power, for which the majority of the tax preferences for renewable energy were directed, produced only 3.6 percent of the nation’s generation in 2012. In addition, the Treasury Department’s 1603 grant program, which offers cash payments to renewable energy companies, cost taxpayers $5.8 billion in 2012. Many states also subsidize green energy through tax preferences as well as requiring renewable electricity mandates that require a specified amount of electricity to be generated from qualified renewable sources like wind and solar.

Clearly, in terms of “bang for the buck,” government programs that coddle renewable energy are losers. In terms of jobs, the losers are the American workers who would otherwise be gainfully employed but for the tremendous waste of taxpayer dollars on the administration’s obsession with “green energy.” As the economy continues to suffer and dollars for federal programs get harder to come by, it is getting increasingly difficult to defend a program that costs so much and produces so little.

For a list of failed green energy companies that received taxpayer support, click here.

IER Policy Associate Alex Fitzsimmons contributed to this post.


View Comments
  • http://www.williamamanning.com William A Manning

    Most people don’t realize how heavily subsidized nuclear energy is, because of its “uniqueness”. Georgia Power’s federal loan guarantee for building two new nuclear power units near Augusta, Georgia and AREVA’s loan guarantee is directed to build a uranium enrichment plant near Idaho Falls, Idaho.

  • Bernard Finucane

    A loan guarantee is not money spent. It is just a form of insurance. Does the author of this article really not know that?

    • http://www.facebook.com/ArkOzark David Carr

      How much of the loans to Solyndra and other “green” companies do you think we’ll get back?

  • http://www.facebook.com/mary.barton.9 Mary Kay Barton

    As Brad Jones (former Supervisor of Italy, NY) correctly states:

    “The reality is actually worse than $11.45 M per job created.

    The DOE list includes two nuclear projects worth $10.33B for 1,110
    jobs. Since nukes are not considered “green” the correct green numbers are
    1,188 jobs at a cost of about $16B or $13.5M per job.

    Assuming that you worked one of these jobs at $50,000 a year, your total
    earnings after 30 years would be $1,500,000. The other $12,000,000 was a
    total waste (although it went into somebody’s pocket) and the return on
    investment of your tax dollars is a minus 89%.

    This administration may be the greatest destroyer of wealth in
    history.”

  • http://greencorruption.blogspot.com/ Christine Lakatos

    I’ve updated the “list of failed green energy companies that received taxpayer support,” with the majority coming from the 2009-Stimulus. I’ve calculated (since the end of 2012) a new number of mainly the bankrupt ones now at 25 with 3 about to go under. And if we keep the ones having issues around 29, we may hit 60 taxpayer-funded green energy failure list! Also used some of your green jobs data in my new post: Thanks IER!

    Americans Bothered By the Way our Government Spends Taxes: Billions Burned on Obama’s Green Energy http://greencorruption.blogspot.com/2013/05/americans-bothered-by-way-government.html#.UY02MoIZwk9

  • http://www.facebook.com/people/Michael-Kelley/100000040604974 Michael Kelley

    What’s the big deal? Greenbacks are the ultimate renewable resource. Our government is printing more of them every day.

  • exdent11

    What a joke this article is! The purpose of the DOE’s LOAN program is to encourage innovative green energy industry development. To assess the jobs that will eventually stream from this program in such a stupid premature way is like criticizing a pharmaceutical company for the hundreds of millions of dollars it spends on developing drugs before they have been approved for use and earn their first dollar. Sometimes ,some are never approved. Does that mean we don’t try? Does that mean we only measure dollars and not the good innovative products bring to society? Successful countries take on grand challenges to move forward while bean counters like this author never accomplish anything.

    • http://www.facebook.com/iam.danceswithdachshunds Iam Danceswithdachshunds

      “like criticizing a pharmaceutical company” WRONG… the money the pharm is risking is THEIRS not the taxpayer’s.

      To prevent fascism, government should be PROHIBITED from loaning/funding any corporation or individual (except in a time of declared war).

  • http://www.facebook.com/ArkOzark David Carr

    I’ll save them some money. Give me $10 million and I’ll get my own job!!!

  • http://www.facebook.com/Ed.Harriet Ed Griffith

    How about the estimated 100 billion dollars for fossil fuel subsidies, grants, ignoring externalities such as clean up and health care costs, and outright gifts? Do they not count? The fact is renewable energy is not playing on a level playing field. I too would favor eliminating all subsidies, but what that means is continuing heavy subsidies to fossil fuels and eliminating any breaks for renewable energy.

    By the way, renewable energy produces much more than 3.6 percent of the nation’s energy. A lie repeated over and over does not become the truth.

    There is a better way. Thirteen countries got more than 30 percent of
    their electricity from renewable energy in 2011, according to the
    Paris-based International Energy Agency. (Contrast that with the United
    States which only has 12.3 percent renewable energy, though some states
    do much better.) Some have over 50 percent, such as Sweden, Spain, and
    Canada. Iceland, Norway and other countries with far less resources than
    the United States have 100 percent. As renewable energy provides a
    bigger portion of the energy pie, costs go down. With fossil fuels,
    costs go up. We know this because it has been demonstrated repeatedly in
    countries which are wisely encouraging renewable energy and thus
    becoming more competitive than the United States. It is estimated that
    the world will spend an extra $8 trillion over the next 25 years to
    prolong the use of non-renewable resources, a cost that would be
    eliminated by eventually transitioning instead to 100% renewable energy.
    See references 132, 137, 141, 200, 230, 284, 295, 299, 300, 332, 337,
    461, 496, 506, 514, 534, 546, 547, 551, 552, 557, 579, 580, 591, 599,
    631, 632, 633, 642, 643, 644, 645, 646, 647, 648 at http://newprogs.org/blog/2011/11/08/environment-under-democraticrepublican-uni-party

    • http://www.facebook.com/iam.danceswithdachshunds Iam Danceswithdachshunds

      That’s the most moronic thing I’ve read in a long time. The AVERAGE tax on profit from oil and gas based production is 40%. Therefore, the federal government is getting almost half of fossil fuel profits making it LUCRATIVE for the feds to keep prices high by limiting supply. How much tax money is collected from wind and solar power companies when you deduct the money they received from government? – ZILCH!

      The subject green loans are hand-outs. What you desperately call ‘subsidies’ to fossil fuel are NOT – they are tax reduction incentives to whatever small oil exploration companies are left – the ones who risk the most to find new sources. They ARE paying taxes! ..but get a small tax break in how they can deduct capital equipment costs, (a lot of the stuff cannot be reclaimed from situ). You, big oil and the feds do not want those little companies around because they can undercut the price of fossil fuel hurting profits AND federal revenue.

      The US has enough oil, gas and coal reserve to power us for at least another 150 years. Look at what those have achieved to build our modern way of living and increase our life expectancy in the last 150 years? And coal is the number one savior of our forests which would be gone if we had kept using wood for power, heat and building materials. Coal opened the door for mining and making steel as well as providing electricity for manufacturing and home heating.

      • ed2291

        Repeating a lie over and over again does not make it the truth. Calling people names does not make a lie the truth. Because this site does not allow us to list websites for fear of spam, I cannot refer you so you have to check for yourself. For anyone checking and using references will see the above comments are demonstrably false.

      • ed2291

        Repeating a lie over and over again does not make it the truth. Calling people names does not make a lie the truth. Because this site does not allow us to list websites for fear of spam, I cannot refer you so you have to check for yourself. For anyone checking and using references will see the above comments are demonstrably false.

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