Why The Department of Energy Should Invest In Renewable Energy

This article provides a defense of the Department of Energy's (DOE) program to fund renewable energy start ups. It is in response to the conservative uproar over the failure of Solyndra, a solar energy company which received loan guarantees from DOE. The article gives a detailed analysis to the decision and makes the case for continued DOE investment in renewable energy. I would like to focus, however, on the broader criticism of the DOE program made by conservatives. They argue that government should not be involved in making investments in private industry. That is a job reserved for the private market because it is better at making investment decisions. Some commentary on this issue follows the analysis of the Solyndra case. Its hard to understand the faith that conservatives have in the ability of markets to allocate capital to the most productive uses after the dot.com bubble and the housing bubble in which trillions of dollars were allocated to businesses that failed, and to the funding of the real estate bubble. They believe in government failure but deny the existence of market failure.