Beacon Power, a Massachusetts-based company that won praise from renewable power activists and loan guarantees from the federal government, has filed for bankruptcy, potentially leaving taxpayers on the hook for $43 million.
Loans Called into Question
The company, which promised to build storage devices for intermittent power produced by wind and solar power facilities, was never able to attract investors. Coming on the heels of the Solyndra bankruptcy, the Beacon Power bankruptcy has a growing number of people calling for an end to federal loan guarantees for risky alternative energy start-ups.
“I don’t think the government should be picking winners and losers for the private sector,” said Barbara Anderson, executive director of the Massachusetts-based Citizens for Limited Taxation. “Obviously, they’re not qualified.”
“We take a pretty dim view of government getting too deeply involved in private companies and picking winners and losers,” said Steve Poftak, research director for the Massachusetts-based Pioneer Institute. “When they start to rend away from support at the early stage of development—at the science and research stage—and get into the balance sheets of companies, that’s [crossing the line].”
More Oversight Needed
Rep. Jim Sensenbrenner (R-WI), vice chairman of the House Committee on Science, announced his intent to offer a bill requiring all Energy Department loan recipients to submit to an independent audit.
Government Ill-Suited to Intervene
Anderson says this confirms the government should not spend taxpayer dollars promoting particular business ventures.
“The government gets all cut up on this and rushes out to spend taxpayer dollars because—my gosh!—they don’t have to earn the funds,” Anderson said. “The whole concept is wrong. Energy is a huge industry, and if someone has a fine idea, they really wouldn’t have any problem getting someone to invest in it.”
“The public sector is ill-suited to make judgments on technology,” he said. “Frankly, the people who are smart enough to make those kinds of investments just don’t work for the state. They don’t work in government.”
Cheryl Chumley ([email protected]) writes from northern Virginia.