Tonopah Solar Company $737 Million Government Loan For Solar Project-Fiction!
Summary of eRumor:
A solar energy project in Nevada will create 45 permanent jobs and cost the federal government $737 million, or more than $16 million per job. Also, the brother-in-law of House Minority Leader Rep. Nancy Pelosi (D-Calif.) stands to gain financially from the project.
The Truth:
This viral email circling the Internet makes false claims and misrepresents a solar energy project in Nevada in an attempt to make a point about wasteful government spending.
In 2011, the Department of Energy (DOE) announced finalization of a $737 million loan guarantee for Tonopah Solar Energy to develop the Crescent Dunes Solar Energy Project on land leased by the Bureau of Land Management in Nevada.
The new facility will employ 45 full-time employees upon completion, but the eRumor’s claim that the jobs will each cost the federal government more than $16 million is false because it misinterprets what a loan guarantee is.
According to Investopedia.com, a government agency agrees to purchase the remaining balance of a loan if a borrower defaults through a loan guarantee. So, a $737 million loan guarantee merely means the government could pay up to $737 million if Tonopah Solar Energy defaulted on the entire balance of the project.
Unless the company defaults on the loan, the government won’t pay anything.
Aside from that, SolarReserve, LLC, the developer sponsoring construction of the 110-megawatt concentrating solar power tower, noted on its website that the project would create 4,300 additional direct, indirect and induced jobs over a 30-month construction period that began in October 2013.
And the eRumor’s claim about the role of Rep. Pelosi’s brother-in-law, Ronald Pelosi, with PCG is based in fact, but it misrepresented the connection.
The San Francisco Chronicle reported in 2011 that Ronald Pelosi was an executive of the private equity firm that owns a 2 percent equity stake in SolarReserve. But a PCG official said Ronald Pelosi joined the firm after it purchased the equity stake, and he won’t benefit from it because he doesn’t own interest in the fund that created that investment.