DOE Green Energy Loan Guarantee Watch Update
An earlier blogpost at Hit & Run cited reporting from Investor's Business Daily that U.S. Department of Energy is rushing to finalize loan guarantees for nine green energy projects before the deadline at the end of the month. So far, DOE has announced two projects backed by taxpayer guarantees totalling about $1 billion. According to the press release for the first project, the DOE is offering:
…a $737 million loan guarantee to Tonopah Solar Energy, LLC to develop the Crescent Dunes Solar Energy Project. The solar project, sponsored by SolarReserve, LLC, is a 110 megawatt concentrating solar power tower generating facility with molten salt as the primary heat transfer and storage medium.
Total jobs: 600 construction and 45 permanent.
For the second project, the DOE is offering:
… a $337 million loan guarantee to Mesquite Solar 1, LLC to support the development of an innovative photovoltaic solar generating project. The optimized 150 megawatt (MW) alternating current photovoltaic (PV) solar generation project will be located in Maricopa County, Arizona….
Total jobs: 300 construction jobs. Oddly, there appears to be some reticence about mentioning any "permanent jobs" associated with the project in the press release. Fortunately, another DOE website was more forthcoming, listing 7 operating jobs for the project.
Of course, DOE bureaucrats are so clever at "investing" in innovative projects that the loan guarantees will never actually be paid out. But just for fun, let's parse how much job bang these projects are supposedly getting for the billion bucks.
Dividing 952 jobs into $1.074 billion, the cost per job would be about $1.1 milion and change. During the halcyon era of fiscal stimulus, Obama administration defenders actually argued that government spending would produce jobs at a cost of only $63,000 per copy. However, data in a February, 2011 report by the Congressional Budget Office suggested that government spending had actually stimulated job creation or salvation at a cost of around $225,000 each.
So if these DOE backed green energy projects were to go bust, that would imply that each job would cost taxpayers about four times more than those allegedly created by the stimulus. But surely that could never happen.