A massive solar power plant built in California's Mojave Desert with billions in federal backing has become a lose-lose proposition for American taxpayers and electricity consumers, too expensive to keep running, too costly to shut down, and too politically entangled for anyone to fix.
The Ivanpah Solar Power Plant, a 3,500-acre facility near the California-Nevada border, cost roughly $2.2 billion to build. It received $1.6 billion in government-backed loan guarantees from the Department of Energy under President Barack Obama in 2011, plus a separate $539 million grant from the U.S. Treasury covering about 30 percent of construction costs. Federal data cited by Fox News Digital showed that between $730 million and $780 million of that loan remains unpaid.
If the plant closes, taxpayers could absorb hundreds of millions in losses tied to the outstanding loan. If it stays open, consumers face roughly $100 million more per year in electricity costs compared to what newer solar technologies would charge. Both the Trump and Biden administrations examined shutting Ivanpah down and supported closure efforts, but California regulators blocked the exit.
Ivanpah was born out of the post-2008 stimulus push. The Obama administration promoted it as proof that federal spending could revive the economy while accelerating renewable energy. Then-Energy Secretary Ernest Moniz called it "a shining example of how America is becoming a world leader in solar energy."
The plant uses about 350,000 computer-controlled mirrors to focus sunlight onto boilers mounted atop three 459-foot towers. The concentrated heat turns water into steam, which generates nearly 400 megawatts of electricity. Commercial operation began in January 2014.
But the technology was already falling behind. Severin Borenstein, an energy expert at the University of California Berkeley, explained the problem plainly:
"When this plant was planned, solar thermal looked like a promising approach, but photovoltaic costs fell much faster than anyone anticipated."
That collapse in photovoltaic prices, Borenstein said, "changed the economics entirely." The plant's solar-thermal approach was "no longer really competitive." NRG, one of Ivanpah's owners, acknowledged the facility could not compete with cheaper, more flexible photovoltaic solar technology and battery storage.
Critics noted the plant produced less electricity than expected and relied on natural gas to remain operational, an awkward dependency for a project sold as a clean-energy landmark. The Obama brand was stamped all over the venture, but the results told a different story.
Pacific Gas & Electric, which buys electricity from Ivanpah under long-term contracts originally set to run through 2039, moved to end those agreements early. In regulatory filings, PG&E described the contracts as part of an effort to reduce "uneconomic resources" in its energy portfolio. The company said in a statement that "ending the agreements at this time will save customers money compared to the cost of keeping them through 2039."
PG&E agreed with Ivanpah's owners to terminate the power contracts, which would lead to closing two of the plant's three units starting in 2026 if regulators approved. Southern California Edison, the plant's other utility buyer, was separately in discussions about a buyout of its own Ivanpah contract.
But in December, the California Public Utilities Commission rejected efforts to terminate the contracts. A CPUC resolution warned that closing Ivanpah could leave more than $300 million in ratepayer-funded transmission and infrastructure tied to the plant "stranded." It was also unclear, the resolution said, how quickly new plants could be developed as a replacement.
So California's answer to a money-losing power plant was to keep it running, and keep billing consumers for electricity that costs far more than the market rate. The state's regulators chose the certainty of ongoing waste over the risk of a one-time write-down. That is not energy policy. It is institutional self-preservation.
The financial wreckage is not the only cost. The Los Angeles Times reported that approximately 6,000 birds die each year because of Ivanpah. The concentrated solar beams incinerate birds that fly through the reflected light field, a problem critics have flagged since the plant's early years.
Environmental groups that might normally defend a solar project have turned against this one. Julia Dowell of the Sierra Club called Ivanpah "a financial boondoggle and environmental disaster." The plant has also drawn criticism for harming desert tortoise habitat in the Mojave.
A project that was supposed to showcase green energy's promise instead became a case study in how government-directed investment can produce the worst of both worlds: expensive power and ecological damage. The Obama administration's record on picking winners in the energy market deserves scrutiny every time a project like this unravels.
Borenstein, the UC Berkeley energy expert, offered a telling observation about the structural trap Ivanpah represents:
"These are long-lived assets with long-term contracts. Even if they no longer make economic sense, you can't easily just walk away."
That is precisely the problem with massive government-backed energy projects. Once the contracts are signed, the loans guaranteed, and the infrastructure built, the political and financial incentives all point toward continuation, no matter how badly the economics deteriorate. The sunk costs become their own justification.
Daniel Turner, founder of the energy advocacy group Power The Future, was blunter. He said the plant made "no economic sense to keep afloat" and called it what it is:
"This is a boondoggle, like most of California's large projects are a boondoggle. At some point, you have to stop throwing good money after bad."
Jason Isaac, CEO of the American Energy Institute, put it in broader terms: "Ivanpah stands as a testament to the waste and inefficiency of government subsidized energy schemes." Alternative energy consultant Edward Smeloff offered a simpler verdict: "It simply did not scale up."
Benjamin Zycher, cited by the Washington Free Beacon, described the entire DOE loan program behind projects like Ivanpah as "all cost, no benefit."
Ivanpah is not an isolated failure. It fits a pattern that taxpayers have seen before: the federal government places a massive bet on a politically favored technology, locks in long-term commitments, and then watches the market move in a completely different direction. When the bet goes bad, the losses fall on ratepayers and taxpayers, never on the officials who championed the project.
The Obama legacy includes a string of green-energy ventures that received lavish federal support. Some succeeded. Others became cautionary tales. Ivanpah belongs firmly in the second category, a facility that was outdated before its first decade ended, propped up by contracts that utilities now call uneconomic, and defended by regulators who fear the political fallout of admitting failure.
Both the Trump and Biden administrations recognized the problem and supported closing the plant. That rare bipartisan agreement should tell you something about how clearly the numbers point in one direction. Yet California's regulatory apparatus overrode both administrations and kept the money flowing.
The political class that built Ivanpah has moved on. The taxpayers and ratepayers stuck with the bill have not.
Several basic facts remain unclear. What is the exact unpaid balance on the federal loan, and who is responsible for it if the plant eventually closes? What specific contracts did PG&E and Southern California Edison seek to terminate, and what was the formal basis for the CPUC's rejection? Who bears the $300 million in stranded infrastructure costs the commission warned about, and how does that compare to the ongoing $100 million annual premium consumers pay for Ivanpah's overpriced electricity?
These are not academic questions. They involve real money taken from real people who had no say in the decision to build this facility, no vote on the loan guarantees, and no recourse when the project failed to perform.
When the government picks winners with other people's money, someone always loses. At Ivanpah, it turns out to be everyone, except the people who made the decision in the first place.