WASHINGTON — The Trump administration is moving forward with a significant restructuring of the Department of Energy’s loan programs, a move initially framed as a dismantling of Biden-era climate initiatives but now appearing to be a more nuanced recalibration focused on energy affordability and national security concerns. Secretary of Energy Chris Wright announced in January the completion of a review of the Department’s Loan Programs Office, claiming to have cancelled or revised approximately 80 percent of the loan portfolio inherited from the previous administration.
The Biden administration had dramatically expanded the scope of the Loan Programs Office (LPO) through the Inflation Reduction Act, providing it with roughly $400 billion in loan guarantee authority to support a wide range of clean energy projects, including new nuclear power plants, advanced battery technologies, and high-voltage transmission lines. The intention was to bridge the gap between private investment and the capital-intensive infrastructure needed for a rapid transition away from fossil fuels.
Wright characterized the initial review as a necessary correction, alleging that the Biden administration had “rushed” loan approvals in the months following the 2024 election. He stated the department was focused on ensuring taxpayer dollars were used effectively and to expand America’s energy supply. However, a closer examination reveals a more complex picture, with many Biden-approved projects continuing to move forward and the administration signaling a willingness to support carbon-free energy sources, even as it prioritizes fossil fuel dominance.
Former federal officials and sources within the Department of Energy, speaking on condition of anonymity due to ongoing work with the government or fear of retribution, say the LPO has largely survived the Trump administration’s overhaul in something close to its original form. Many projects intended to support emissions-free energy, including major transmission upgrades and nuclear power plant construction, remain untouched.
The shift in approach may reflect a growing recognition within the administration of the political pressures surrounding energy prices. According to a policy analyst at the Center for Public Enterprise, Advait Arun, “It sounds like the Trump administration seems to be responding to the energy affordability politics in a way that is, if not constructive, at least acknowledges that steel needs to get in the ground.”
The LPO, initially established during the George W. Bush administration in 2005, gained notoriety under President Barack Obama when a $500 million loan to the solar cell manufacturer Solyndra resulted in significant losses for taxpayers. Despite the controversy, the program also financed successful ventures like Tesla, and its overall loss rate remains relatively low at 3 percent. The Inflation Reduction Act significantly boosted the LPO’s capacity, but its deployment of funds was initially hampered by bureaucratic hurdles and a cautious approach stemming from the Solyndra experience, according to a report by former Energy Department staffers who found the “executive branch machinery… defaulted to caution, process, and reactive strategies.”
Upon taking office, Secretary Wright implemented significant changes, including multiple leadership changes within the LPO, substantial staff reductions – with some employees reportedly recruited by Elon Musk – and a halt to communication with borrowers. Jen Downing, a senior advisor at the LPO during the Biden administration who remained for a period under the Trump administration, testified to Congress last summer that the new leadership spent months scrutinizing nearly every loan made under the previous administration.
While Wright claimed to have cancelled $30 billion in loans, many of these cancellations were initiated by the borrowers themselves, a common occurrence with complex and risky projects. Jigar Shah, who led the LPO under Biden, stated, “The number is fake. I suppose in some ways, it’s to convince Trump that they’re shutting down loans.”
Several Biden-approved projects have continued without interruption, including a $1.45 billion loan to QCells, a solar panel manufacturer in Georgia. In the case of a proposed lithium mine at Nevada’s Thacker Pass, the department doubled down, taking an equity stake in the project rather than cancelling the loan.
The LPO is now led by Greg Beard, a former Apollo executive and crypto mining company operator. Thus far, Beard has approved projects that originated under the Biden administration, including a $26.5 billion loan to Southern Company for upgrades to its nuclear power plant in Georgia, new battery storage facilities, and 1,300 miles of transmission line improvements. However, the final version of the loan agreement includes 5 gigawatts of new natural gas power generation, replacing a previously planned solar project.
The Department of Energy has held meetings with data center developers, offering to build nuclear power facilities on federal land. Beard has indicated a pipeline of around 80 projects, though this is less than the 191 projects in the pipeline in December 2024. He has also suggested a requirement for corporate guarantees for all loans, potentially limiting the number of projects that qualify.
Thanks to changes enacted in President Trump’s One Big Beautiful Bill Act, the program can now directly support fossil fuel generation, a practice prohibited under the Biden administration. However, it remains unclear whether the administration will prioritize such projects, given the availability of private capital for natural gas development.
Spokespeople for the Department of Energy and the Energy Dominance Financing office declined to comment or make Beard available for an interview. The program is currently scheduled to expire on September 30, 2028, unless Congress chooses to reauthorize it.
