Former Texas governor and presidential candidate Rick Perry will soon be confirmed as the next Secretary of Energy. He is already facing pressure from the Trump administration to eliminate, or at least significantly curtail, a controversial Department of Energy program that provides loans and loan guarantees to certain types of renewable and clean energy technology companies.

The program was inaugurated during the George W. Bush administration as part of the 2005 Energy Policy Act and since then has made loans or loan guarantees (sometimes more than one) to 30 different companies. The loan guarantee program is designed to provide money to energy businesses that are too risky to receive loans from banks. The idea was to form a portfolio of investments in which some might fail, but that as a whole would generate income for the program.

In other words, the aim was to achieve a net financial gain for the government. This puts the government in the worst possible position as a financier. It makes risky bets on companies like a venture capital investment firm, but it can only receive remuneration, in the form of interest, like a bank. Even worse, in many cases, the government only provides loan guarantees, risking loss but rarely benefitting financially from the gain.

In November 2016, the program claimed that its portfolio of direct loans and loan guarantees had generated a total of $1.65 billion in interest payments. However, when held up against the money lost in bankruptcies and defaults plus considering that the government has been running this program for over a decade, the balance does not look so good . It is clearly not the best way to spend taxpayer money if the government is also trying make money.

Many who support the program (particularly its former portfolio administrators), point to the success stories that have come from the loans. However, upon closer inspection, many of these program recipients touted by the agency are not, in fact, commercially successful.

For example, a former program director under the Obama administration, pointed to the Vogtle power plant as an example of a successful program. In 2014, the Department Energy guaranteed loans to Georgia Power to build two new nuclear reactors at the Vogtle nuclear power plant. These would be among the first new nuclear reactors in the United States in 30 years. The Department of Energy has guaranteed a total of $8.3 billion in loans to various contractors in this project, which is now more than three years behind schedule and more than $3 billion over budget. The project is further complicated by problems with the plant’s original nuclear reactor that was recently forced to shut down entirely.

The program’s former portfolio manager also cited the Ivanpah solar thermal plant in Southern California as a successful project that received a $1.6 billion loan guarantee (and another $600 in federal tax credits). Ivanpah, unlike the Vogtle nuclear plant, is up and running. However, it is not generating nearly as much clean energy as was called for. In 2015, the plant’s second year of operation, its carbon emissions jumped by nearly 50%. This was due, in large part, to increased use of natural gas needed to start the thermal system when the sun is rising and during times of cloud cover. NRG Energy NRG +1.56% Inc., the plant’s operator and co-owner, claims that the solar-thermal plant is only using more natural gas because it is finally increasing the amount of solar energy it is generating – something even environmentalists take issue with, given that the plant’s perpetual need for natural gas was not something made clear to Californians when the plant was approved in 2010. Even though the plant uses more natural gas and pollutes more than California law permits, because it burns most of its natural gas at night, the plant still qualifies as a source of alternative energy for California consumers, though regulators say they are currently reviewing the plant.

These so-called successes, however, do not make up for the failures and mismanagement of taxpayer money. Several of the companies awarded loans and loan guarantees – Solyndra and Abound Solar (solar panel manufacturers) and Fisker (electric car manufacturer), for example – collapsed in spectacular bankruptcies during Obama’s tenure, leaving the government on the hook for over $1.4 billion. This nearly cancels the full $1.65 billion touted as interest income for the government in the first eleven years.

The concept behind this program has harsh critics, from a purely moral and civic standpoint . When individual investors join venture capital funds to invest in new companies they assume a certain amount of risk and have to be qualified investors. In other words, they have to have the money to lose. The average American taxpayer is not a qualified investor and did not sign up to allow a group of unknown individuals to invest his or her money in risky energy technology businesses.

A Solyndra Inc. solar panel manufacturing facility stands in Fremont, California, U.S., in 2010. (Ken James/Bloomberg)

Evidence indicates that the programs decision makers may have been less equipped than their private sector peers to judge technologies and companies. When the Department of Energy “invested” in Solyndra the company appeared to have a competitive advantage. Solyndra, unlike its competitors, did not use silicon in its solar panels, and silicon was prices very high at the time. However, when the price of silicon collapsed, so did the company. Though this would appear to be bad luck or poor timing, most market watchers forecast the drop in silicon prices. According to the CEO of Cascadia Capital, “This was not a hard call.” According to a New York Times investigation, the Department of Energy was so eager to make these loans that it missed or overlooked evidence that the company was already in financial distress.

The Solyndra debacle also exposed the extreme potential for corruption in the loan program. Solyndra officials lobbied the White House and Obama advisors extensively and later investigations revealed that the Department of Energy did not conduct due diligence. During Congressional hearings into the Solyndra bankruptcy, executives even took the fifth. The potential for corruption when the government is picking and choosing winners and losers with taxpayer money is so high that the program should be wound down and eliminated on those grounds alone.

One could argue that the program has intrinsic value regardless of whether it is financially soluble or whether its projects generate the clean energy they promised, because new energy technologies need to be cultivated. However, each and every one of the companies that received a loan or a loan guarantee has multiple competitors who did not receive government money and government support. In choosing Nissan, Ford, Fisker and Tesla to received loans to manufacture electric cars the government gave them an unfair advantage over Toyota, GM and all of the tinkerers and innovators out there with great ideas who lack the connections and the clout to get in front of the right people.

The new administration cannot simply shut down the loan program because it was created by an act of Congress. However, it can effectively end it by halting new loans and new loan guarantees.

Ellen R. Wald, Ph.D. is a historian & consultant on geopolitics & energy. She is a Non-Resident Scholar at the Arabia Foundation. Her book, Saudi, Inc., will be published in 2018.