Jigar Shah is on a multi-billion dollar mission to upgrade U.S. energy for the AI age

Jigar Shah is in a race against time, his progress measured in part by a map on his office wall. Each point on the map represents a project financed by the Department of Energy’s Loan Programs Office, where Shah is the director. The 60 active LPO-financed initiatives include a factory for EV batteries or sustainable aviation fuel, a grid upgrade, and a next-gen geothermal plant.

Shah’s obscure office is now busy reviewing paperwork for billions in new projects, with the goal of accelerating clean energy, making it affordable, on-shoring its supply chain of minerals and manufacturing, and creating millions of jobs, especially in struggling communities. Out of an initial $400 billion pot of funding afforded by the infrastructure bill and the Inflation Reduction Act, the office’s remaining loan authority includes about $72 billion for innovative technologies and about $58 billion for energy infrastructure reinvestment (that is, repurposing or replacing defunct energy infrastructure like old coal plants). But lending out that cash isn’t easy. It can take years to get a deal out the door for companies that apply—and those applications are no sure thing, given how many CEOs are hesitant to step outside of traditional financing and take a big government loan.

It helps that Shah is well-known in clean tech circles as a pioneer entrepreneur and investor (he founded solar developer SunEdison and financier Generate Capital) and, arguably just as importantly, as cohost of the popular podcast, The Energy Gang. (He’s also a former Fast Company columnist.) Shah’s robust Rolodex has helped him to connect directly with companies and investors, and to double the LPO’s staff by recruiting more than 100 people from the private sector. 

The office is currently managing a pipeline of 203 applications totaling $262.2 billion in loans across 48 states, according to a spokesperson, but so far their slow, painstaking work has resulted in only four loan approvals. The caution and care is intended to balance out the inherent risk that’s built into the LPO’s mission: It has a mandate from Congress to provide backing to new technologies that might otherwise struggle to find investors. It provided a vital $465 million loan in 2010 to a then-struggling Tesla, and backed some of the country’s first large solar farms more than a decade ago. Infamously, the office also lost more than a half-billion dollars on Solyndra, the solar manufacturer whose bankruptcy and resulting Congressional investigations cast a pall over green tech. (From then until 2021, LPO approved only three loan guarantees, for a single nuclear power plant in Georgia.) 

Shah, who was grilled during a tense Republican hearing on climate spending in October, says the risk around Solyndra was poorly managed, and points to safeguards made by his office. And he emphasizes that, despite the occasional misfire, the office actually makes money for the government. It has a loan-loss rate on par with commercial banks, and has earned the U.S. $4.9 billion in interest payments since the program’s inception, including $484 million last year, according to the Energy Department. And he emphasizes that LPO has already left its mark on the green economy and the climate, helping solar, wind, battery storage, and EVs all get over a critical bridge to bankability.

The hope is his office can do something similar for the rest of the clean energy supply chain, providing investors and bankers assurances about everything from domestic battery manufacturing to long duration energy storage to smart grids. Shah already sees proof of the office’s impact in “huge” multiyear power purchase agreements that customers have signed for upcoming LPO-supported geothermal, hydrogen, and nuclear projects, a mechanism that helps provide further certainty to developers and investors. 

The sense of purpose in the office is matched by one of urgency: there’s a 2026 deadline included in the climate bill, and the U.S. is aiming to cut carbon emissions to half of 2005 levels by the end of the decade. At the same time, energy demand is spiking faster than clean energy can keep up with, prompted in part by the power-hungry data centers used to train and operate generative-AI systems like ChatGPT. Boston Consulting Group estimates consumption at US data centers alone is poised to triple from 2022 levels, leading some to suggest that—absent deployable clean tech—more coal and gas-fired plants will be needed.

Amid those challenges, the Loan Programs Office finds itself on the precipice of a new existential threat: Should Republicans win control of Congress in November, there’s reason to believe they’ll claw back funding, if not pull the plug on the operation entirely. Ongoing political scrutiny could slow down its work, but it could also steel its resolve. For Shah and his colleagues, the stakes are nothing less than the future of the U.S. energy economy, and the clock is ticking.

Editors’ note: a previous version of this story included quotes which our reporter understood to be on the record but which the source intended to be on background. We regret the misunderstanding.

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