Nonetheless, the DoE defends the government's foray into green venture capital. At his first policy speech in New York last month, Energy Secretary Ernest Moniz called the program's track record "quite remarkable." Moniz touted the DoE's most conspicuous success story—a $465 million loan to Tesla that was repaid early in May—as evidence that green loans work, even as he said that not every investment would pan out.  In response to questions from CNBC.com, an energy department spokesman said expected losses on funding to VPG, Solyndra and others "only represent about 2 percent of our overall loan program portfolio of approximately $34 billion, and less than 10 percent of the loan loss reserve Congress set aside for the program."  But that won't silence critics of government-funded start-ups.  (Read more: Once 'overhyped and sexy,' solar tumbles back to earth)  "Governments are getting out of, not going into, the subsidized alternative energy business," said Pat Michaels, director for the Center for the Study of Science at the Cato Institute, a libertarian think-tank.  Indeed, public investment in clean energy is drying up—a sharp turnaround from just five years ago, when the U.S., Europe and China were locked in a competitive race to fund various wind, solar and nuclear projects. While China remains committed to alternative energy, big loan defaults by Chinese solar companies LDK Solar and Suntech Power have cast a shadow over the solar sector.  Back in the U.S., the world's largest energy consumer shows no signs of ending its reliance on fossil fuels, which even Energy Secretary Moniz acknowledged recently was a "ground truth" unlikely to go away anytime soon.  Critics including Cato's Michaels argue the domestic, fossil-fuels energy boom is all the more reason for the federal government to exit the green-funding business. "The US was slow to come to the [alternative energy] party, and it's going to be slow to leave the party," he said.
The Energy Department is sticking by its green loan program, even as critics question the government's moves into venture capitalism.