BETWEEN Los Angeles and San Francisco, NRG Energy is building an engineering marvel: a compound of nearly a million solar panels that will produce enough electricity to power about 100,000 homes.
The project is also a marvel in another way. Taxpayers are providing subsidies worth almost as much as the $US1.6 billion ($A1.56 billion) cost of the project.
The government support has largely eliminated the risk to private investors and almost guaranteed them large profits for years to come.
Advertisement: Story continues below The beneficiaries include Goldman Sachs and Morgan Stanley, General Electric, utilities such as Exelon and NRG and Google.
A great deal of attention has been focused on Solyndra, a start-up that received $528 million in federal loans to develop cutting-edge solar technology before it went bankrupt, but nearly 90 per cent of the $16 billion in clean-energy loans guaranteed by the federal government since 2009 went to subsidise these lower-risk power plants, which in many cases were backed by companies with vast resources.
When the Obama administration and Congress expanded clean-energy incentives in 2009, a gold-rush mentality took over.
From 2007 to 2010, federal subsidies jumped from $5.1 billion to $14.7 billion. Most of the surge came from the economic stimulus bill, which was passed in 2009.
The windfall for the industry raises questions of whether the Obama administration and state governments went too far in their support of solar and wind power projects, some of which would have been built anyway, according to the companies involved.
Obama administration officials argue that the incentives make economic and environmental sense. Beyond the short-term increase in construction hiring, they say, lower carbon emissions will benefit the country for decades.
But in an October 2010 memo prepared for the President, several of his advisers said investors had little ''skin in the game''.
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