If Republicans have their way, Sunnova and Solyndra are about to have more in common than just being solar companies with Pokémon-sounding names.
More than 12 years after conservatives targeted Solyndra — a scandal-plagued, now-defunct solar company that received a $535 million loan from the Energy Department’s Loan Programs Office under President Barack Obama — Republicans are attempting to run the same playbook on the rooftop solar company Sunnova, Bloomberg reported Thursday. They’ve literally said as much: “Solyndra is going to look like chump change compared to the amount of money that’s been wasted by this administration,” Wyoming Republican John Barrasso, who is leading the charge with his Senate colleague Cathy McMorris Rodgers of Washington, bragged in comments to reporters last month.
The Solyndra fiasco of 2011 effectively shut down the Energy Department’s loan program, which aims to finance the U.S. energy transition by backing emerging technology companies that otherwise might be considered too risky for traditional lenders. At the time, Republicans had zeroed in on Obama’s Energy Department over its approval of a loan to Solyndra, which went insolvent shortly afterward and was later discovered to have misled the department during its application process. The whole ordeal effectively gave the Loan Programs Office “Solyndra PTSD,” Jigar Shah, the current director of the office, told The Wall Street Journal last year. It wasn’t until Biden revived the LPO as one of the three pots of money fueling his climate agenda that it really started loaning in earnest again. Under the Inflation Reduction Act, its loan authority grew to over $400 billion.
And despite the high-profile failed project and goal of helping high-risk businesses, the LPO has been mostly a major success: around the same time it was backing Solyndra, the office also gave a $465 million loan to Tesla, which in turn paid back the loan with interest a full nine years early. The LPO has actually made the government almost $5 billion in interest payments, Bloomberg adds, while LPO-supported projects were responsible for producing enough clean energy to power 900,000 homes and enough fuel-efficient vehicles to displace 2.1 million gallons of gasoline in 2022, the Department of Energy reports.
All this brings us to Sunnova Energy. A rooftop solar company based out of Houston, Sunnova was approved for a $3 billion loan guarantee by the LPO last April. Since then, the company has become a target of conservatives and right-wing media personalities, who seem intent on finding a Solyndra-shaped scandal “that would aid their efforts to repeal President Joe Biden’s landmark Inflation Reduction Act and its historic $369 billion in climate and energy provisions,” Media Matters writes. The Washington Free Beacon, citing customer complaints, has alleged Sunnova scammed elderly dementia patients, while Fox News’ Jesse Watters has repeatedly gone after the company for supposedly handing away “$3 billion — billion — of your money.” (Sunnova only has a loan guarantee; money has not been distributed yet, E&E News reports).
In December, Barrasso and Rodgers wrote a letter citing the scam allegations and demanding related documents from Shah, professing a desire to learn more about “the approval of DOE’s loan guarantee.” The pair have also asked the Energy Department’s inspector general to look into whether Shah has shown favoritism to companies linked to the Cleantech Leaders Roundtable, the renewable energy organization he founded and led until he left for the Department of Energy in 2021. (Shah has denied the accusations and said he has “no role to play whatsoever in choosing who gets a loan” and that the decisions are in the hands of staff).
Beyond all this being an obvious and stated Solyndra rerun, the “increased scrutiny of the [loans] program could deter potential applicants for funding,” Bloomberg further notes, pointing out that shares of Sunnova dipped 16% in December after Barrasso and Rodgers singled the company out in their letter.
However, while analysts generally agreed that the whole situation shows the risk of becoming a political target, Pavel Molchanov of Raymond James & Associates wrote in a research note on the day of the Republicans’ December letter that “we envision minimal risk of any consequences for [Sunnova] in a substantive sense, and view today’s move as an overreaction.”
