Private banks should be involved in issuing government loans for innovative energy technologies, just as they were in the government’s emergency pandemic response, former Energy Secretary Steven Chu said Tuesday.
“If you slip up and there’s a little bit of a scandal, then the opposite party is all over you, so it becomes very inefficient,” Chu said.
Chu was at the center of controversy surrounding the 2011 collapse of Solyndra, a solar panel manufacturer that defaulted on a $535 million loan guaranteed by DOE.
“So there’s a huge overhead, and a lot of companies didn’t want to touch a government loan because they said, ‘I don’t want to deal with all this paperwork.’” The solution, he suggested, was demonstrated by the CARES Act Coronavirus economic stimulus: have private banks administer government loans. “If you notice, during the covid-19 crisis, they wanted to get some money out to people, they did not create a government program. They let the banks get it out,” Chu said. “This idea of using the private sector to disperse seems to be more efficient. The best of all possible things, if we work with banks so that they do some of the legwork, because the paperwork in the loan program is horrendous.”“The only trouble is they gave it to the big commercial banks,” he said.
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