Massachusetts invested $58 million in Evergreen Energy, a solar manufacturer in 2008. Governor Deval Patrick, a friend of Obama, with a similar resume, is a big proponent of solar and government involvement in the private sector. Evergreen shut down the plant in January saying there wasn’t enough government help to make it work.
Massachusetts is a piker compared to the Department of Energy. Dr. Chu has billions to invest in failures and future failures. $58 million is chump change to Dr. Chu and President Obama. They have almost unlimited capacity to waste your tax dollars.
Here’s three of their big success stories. Look them up for yourself in the financial pages. Greentech Media touts them as successes.
The first, BrightSource Energy. It has $530 million in private equity, and a loan guarantee from the DOE of $1.3 billion. That’s right billion. The company has been at it for seven years. The first plant hasn’t come on stream yet. Projections are for the plant to cost $2 billion when completed. The highest cost plant in the area, if not the country ,for the projected output. Estimates are for the plant to generate $125 million in revenue at the low end and $150 million at the high end. Costs will be $120 million at the low end and $140 million at the high end. This doesn’t include costs for gas, water, or other overhead. Just debt service on the DOE loan, and direct labor at $10-15 million a year. Guess they will make it up with volume, right DOE?
Solyndra is the second. Their deal is commercial solar rooftops. Started in 2005 with a billion in equity venture capital. And, with $535 mm in DOE debt. The company had annual revenues exceeding $140 million in 2010.
They pulled a proposed IPO that was to raise $300MM, pulling down the $535 MM in DOE debt. They are now at a 26% debt/equity ratio for a money losing company where debt exceeds revenues by a factor of 6.
Want to put some money into this loser?
Last, Fisker Automotive. An electric vehicle manufacturer. Raised $350 million in private equity, and has a $528 million loan from the DOE. It’s four years old. They project they will sell 15,000 cars per year at $95K per car. They have reduced the year one shipment estimate to 1,000 cars. Of course, the Obamamobile, the Volt, was to ship 20,000 in year one. Last month they sold 120. Do you, like the DOE, believe a company can build and ship 15,000 cars and generate $1.5 billion in revenue without raising their debt load? Their debt/equity ratio is now 110% and the private equity is drying up. Guess who will have to loan several million more to get his turkey off the ground? You will, of course.
If these are the DOE success stories, what do the others look like? And, who is looking into this big new Freddie and Fannie mess being run by a community organizer and a PHD lab rat?
