End The “Green New Scam” Loan Machine

Authored by André Béliveau via RealClearEnergy,

The U.S. Department of Energy’s Loan Programs Office (LPO) was created to help advance clean-energy infrastructure and technologies that allegedly had the potential to be adequate energy resources but struggled to secure private investment. With discussions underway about staffing and budget changes, defenders of the climate-centric status quo in energy policy rushed to preserve it, claiming LPO is essential for energy dominance and manufacturing growth.

In reality, LPO is a taxpayer-backed ATM for unreliable energy technologies and infrastructure that can’t compete without federal funding.

Before the end of his presidency, Joe Biden squeezed in $25 billion in LPO loans for various green energy projects, attempting to undercut President Donald Trump’s energy plans. Advocates will claim these loans and others supported critical infrastructure such as battery storage, transmission upgrades, and flexible demand response. However, these investments primarily offset the deficiencies of intermittent energy sources like wind and solar. Rather than strengthening a reliable grid, such investments introduce arbitrary costs to accommodate unreliable generation.

While making notable and worthwhile investments in reliable nuclear technology, LPO has overwhelmingly become a central gear in the “green new scam” machinery: a system built on subsidies and climate ideology, not competition or energy realism.

The problem isn’t just taxpayer waste. It also distorts energy markets and destroys grid reliability.

LPO’s funding of intermittent energy sources and the Inflation Reduction Act’s green subsidies have wreaked havoc on how our grid operators and energy markets balance affordability in power-generation planning. These sources don’t operate on the same terms as traditional baseload or dispatchable generation. Instead, they rely on favorable regulatory treatment and financial backstopping from taxpayers. That imbalance leads to capacity shortfalls, distorted price signals, and reliability risks that compound over time.

These green energy schemes disconnect energy policies from the reality that American families and businesses need abundant, affordable, and reliable power—not experiments based on luxury beliefs. 

This is particularly damaging in electricity markets like PJM, which serves Pennsylvania, Maryland, Virginia, Washington, D.C., and most mid-Atlantic states. Regional transmission organizations like PJM reward performance and reliability through transparent price competition. However, when LPO-backed intermittent projects bypass those dynamics through guaranteed government financing and special regulatory treatment, the result is suppressed prices for reliable generators and disincentives for investment in reliable energy capacity. Over time, this pattern erodes the reliability that energy-rich states like Pennsylvania have long delivered.

With vast natural resources and a reliable power-generation mix that makes it the top electricity exporter in the nation, Pennsylvania should be a pillar of American energy dominance. It is the country’s second-largest natural gas producer. Moreover, the shale boom that emerged from the region turned the U.S. into the world’s largest oil and gas exporter. The Keystone State is an energy powerhouse. Yet, the commonwealth has electricity prices above the national average, partly due to market distortions from renewable energy mandates at the state level and federal subsidies for unreliable energy.

At a time when the nation faces rising electricity demand, mounting grid reliability challenges, and geopolitical threats to energy security, it is high time to reevaluate the LPO, including whether it should exist at all.

If it continues, it must be completely reformed. LPO investments should prioritize infrastructure that meets real-world demand regardless of the weather or the time of day. They should also target infrastructure projects that enhance grid security and technologies that attract private investment and minimize taxpayer risk. Ultimately, the program must stop serving as a revolving door for green cronyism. If fully repealing LPO is off the table, policymakers must refocus the program on energy development that keeps the lights on and serves the needs of modern life.

The so-called clean energy transition financed through LPO is neither clean nor affordable. It is also not focused on delivering reliable power to lead us into the future. Its underlying net-zero premise fosters degrowth and deindustrialization and locks out innovation.

President Trump and Energy Secretary Chris Wright have rightly embraced energy realism and rejected “all-of-the-above” energy schemes. Policymakers must free the U.S. Department of Energy from Joe Biden’s policies and align the agency with the Trump administration’s goals for reliable, affordable, and secure energy.

It’s time to end Washington’s green-loan machine. We must either reform it to truly serve American energy dominance or retire it for good.

André Béliveau is Senior Manager of Energy Policy at the Commonwealth Foundation, Pennsylvania’s free-market think tank.