The uncertain future of federal clean energy loans

The U.S. Energy Department launched its Loan Programs Office back in 2005 under then-President George W. Bush with a goal of lending essential funds to clean energy projects that banks found too risky. It’s since had some standout successes, including financing some of the country’s first solar and wind farms and jumpstarting a little electric vehicle company called Tesla.

But the LPO really found its stride with the passage of the Inflation Reduction Act, which added billions of dollars to the office’s lending ability. Under President Biden, it has announced close to $37 billion in loans for clean energy projects, including electric vehicle battery factories in Kentucky and Tennessee and lithium processing plants in Nevada.

But the coming Trump administration has put some of the LPO’s conditional, unfinalized loans in jeopardy. Republican lawmakers this week told E&E News that the LPO is a prime target for the GOP’s efforts to boost government ​“efficiency” and cut spending, and Project 2025 specified it as target for elimination or reform.

That possibility is already having a chilling effect. The LPO on Monday issued a loan to help Stellantis and Samsung build electric vehicle battery plants in Indiana, but it’s unclear if it’ll be finalized before President-elect Trump takes office. The same uncertainty stands for the Grain Belt Express transmission line, which got a conditional loan guarantee from the LPO last week.

Some Republicans say the LPO is worth saving, telling E&E News they may aim to redirect its lending toward nuclear, geothermal, and other energy projects they favor. And given that those loans help boost domestic manufacturing, and that the LPO’s portfolio even turned a profit in 2023, there’s a strong economic case to be made for letting it carry on.

More clean energy news

🤝 States take charge: The Northeast’s 11-state Regional Greenhouse Gas Initiative offers a model of successful state-led action on decarbonization, and is considering ways to expand participation as Trump pledges to roll back federal climate policies. (Energy News Network)

⚖️ Environmental injustice: Environmental justice groups worry that millions in federal grants aimed at increasing climate resilience in disinvested communities will not be disbursed before the Trump administration can end the program. (Inside Climate News)

💵 Taxing details: Analysts say Inflation Reduction Act tax credits may survive the Trump administration, but could face shorter phase-out dates as Republicans seek ways to offset promised tax cuts for wealthy individuals and corporations. (Canary Media)

⚠️ Pipeline dangers: Whistleblowers warn the federal Pipeline and Hazardous Materials Safety Administration is ​“putting profit over safety” by largely relying on private inspectors hired by pipeline companies to monitor compliance with safety rules. (E&E News)

📊 Climate tech’s bright future: Climate tech investors anticipate some companies will be harmed by Trump administration policies, but say the sector is overall more resilient and less dependent on public subsidies than in the past. (TechCrunch)

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