Secretary of Subsidy

Mr. Bryson, who had a long tenure running California energy company Edison International, has more recently served as chairman of BrightSource Energy, a startup specializing in solar-thermal power. Founded in 2004, the company has attracted more than $500 million in private funding and has become a renewables darling, with agreements to supply electricity to California utilities PG&E and Southern California Edison.

That’s the good news. But the company’s SEC filing in April for a $250 million IPO tells a more, er, interesting story.

The company has posted a string of net losses, totaling $177 million. Much of its $32 million in revenue over the past three years has come not from power generation, but from a contract with Chevron to use its technology to recover . . . not-so-renewable heavy oil. The filing advises investors that BrightSource has “generated substantial net losses and negative operating cash flows since our inception and expect[s] to continue to do so for the foreseeable future.”

There’s also trouble at its flagship venture, a 3,600-acre solar project in the Mojave desert called Ivanpah. In April, the Bureau of Land Management suspended some construction in the name of “threatened” desert tortoises. The company faces at least two lawsuits from environmental coalitions. Its technology has never been implemented on a “utility-scale” project, it depends on “unproven” equipment necessary to clean the Mojave dust off its solar mirrors, and the project faces potential cost overruns. The Energy Information Agency also lists solar-thermal as the most expensive source of energy on the books—making offshore wind look cheap by comparison.

Fortunately for BrightSource, its efforts are sustained by an impressive array of federal, state and local subsidies, including a $1.6 billion loan guarantee from the Department of Energy, one of the largest solar guarantees on record. The company notes federal provisions providing solar projects with a 30% investment tax credit through 2016, as well as accelerated depreciations of capital costs for solar entities, among other goodies.

The risk is that the subsidy spigot could someday be turned off as voters get wise to the high costs, economic inefficiencies and unintended environmental side-effects of renewables. That’s a possibility the filing acknowledges, though it adds brightly that it expects demand to “continue to increase as a result of regulatory policies and incentives put in place to reduce carbon dioxide emissions and improve energy security.” As an example, it points to California legislation requiring retail energy sellers to “derive 33% of the energy they supply from renewable energy sources by 2020.”

Which brings us back to the President’s praise for Mr. Bryson as an innovator. All technologies—including those connected to renewables—involve risk, and entrepreneurship means taking chances on innovation. But a core conceit of this Administration’s economic policy is that it can achieve better results if government allocates capital to favored companies rather than letting private markets do the job. The results so far have been as underwhelming as the current economic recovery.

In nominating Mr. Bryson, Mr. Obama has chosen a man who would appear to believe wholeheartedly in this model of politicized investment. Senators might want to ask the nominee whether he represents a vision of “commerce” that bears any relation to what is supposed to happen in a free market