[ASSURAS] How much taxpayers should have to support the clean energy industry through government subsidies and loan guarantees, especially in light of the recent bankruptcy of solar panel maker Solyndra. Here's the Energy Department's answer during a recent Congressional hearing.

[JONATHAN SILVER, DEPARTMENT OF ENERGY] While we are all disappointed in the outcome, Solyndra's situation should not overshadow the professional work that the department's loan programs have done to date, or the need to continue to find ways to support clean energy in this country.

[ASSURAS] The day before the Solyndra affair broke, I sat down with Energy Secretary Steven Chu to talk about the challenges facing the Obama administration's clean energy push.

Mr. Secretary, a few weeks ago, venture capitalist John Doerr gave the United States a grade of "C" on clean energy, and a major solar company, Evergreen, recently declared bankruptcy. That's got to be disappointing to you.

[CHU] It is. I think it's become a very competitive market, especially if you consider the fact that photovoltaics, silicon photovoltaics, were invented in the United States at Bell Laboratories. But that, while it's a setback, I think you shouldn't give up the fight. I think that the market for solar energy, for renewable energies of all kind, and for the energy market in general, is so vast that we have to hang in there and prevail.

[ASSURAS] But a grade of "C" -- how do you turn that around? You're saying, "Let's prevail," but how?

[CHU] Well, first, we do need an energy policy. We do need to recognize that there are climate risks. And we need to know that the future world will be needing, will have to transition to clean energy. Hence, who's going to supply those technologies to the world? Is it going to be China, is it going to be Western Europe, or is it going to be the United States? We should be creating financial arms, with the help of the government, backed by the full faith of the U.S. government. Other countries are doing this. China is doing this, Great Britain, Germany. Spain, others -- And so this is one thing.

[ASSURAS] Don't you have a major problem, at least at this deficit reduction era right now, with Republicans in Congress essentially being against the president's plan to go to clean energy sources by 2035 -- wind, solar, nuclear, natural gas? So where is the compromise?

[CHU] Okay, there's a few things we can do that cost very little or nothing. One thing is, for example, a clean energy standard. Now, what does that mean? Does it cost the taxpayers anything? No. It says, a certain fraction of energy will have to come from renewable or clean energy sources. If you can make natural gas and coal clean, that will count, to the extent you can get out the carbon dioxide. That, coupled with a good research program, which costs very, very little.

There is a concern that, because renewables are not as economical as fossil fuel, that it would drive electricity prices up, and that's why I emphasize that you have to do this in conjunction with a good R&D program to drive those prices down.

Let me give you an example. Solar energy, which is quite high. Its price has come down by 50% in the last five or six years. It's going to come down by another 50%. And we think that there's a chance it could come down by 70%. At that point, you're talking about wholesale electricity, at utility scale, at 6 or 7 cents, levelized cost, per kilowatt hour. That's as much as you would have to spend for any fossil fuel plant without subsidy.

[ASSURAS] Without subsidies, but in the meantime, there have been subsidies, and that's where your opponents continuously bang against the wall and say, "No, it's not cost competitive. We're having to put too much money in."

[CHU] Well, we have subsidized most energy industries ever since the beginning of our history. Oil and gas subsidies have started and been continued for about a hundred years. I think we can pull the plug on renewable energy way before that, and so, you know, another 10 or 15 years, something like this, because of the driving need to get to this clean energy transition.

[ASSURAS] Let's talk about the jobs connected with clean energy. The president has talked for years about clean energy jobs helping deal with the unemployment crisis, but the Brookings Institute recently reported that in the past seven years, only 600,000 such jobs have been created, so where are those jobs for millions of Americans who are unemployed?

[CHU] I can't speak directly to the numbers of the Brookings Institute, but I would say that, if you look at the things -- Consider what the energy markets are. Just the cost of energy. It's over a trillion dollars. We know that our buildings, both residential and commercial, are not the most energy efficient. We know, if you do things correctly, if you improve the air spaces, the ceiling, those investments can pay for themselves, if you do it right, within four or five years. And when you do that, it's cost-effective to retrofit your home to save energy, to save money, but in doing so, you've created jobs.

[ASSURAS] In Washington, the conventional wisdom is that China is winning the clean energy race. America's falling behind -- agreed?

[CHU] It is certainly a threat. First, their leadership makes no bones about it. They say, "The climate's changing. Humans have caused it. If we don't do something about it, it will be devastating to China and the rest of the world."

They also see a great economic opportunity, and because of that, because of these huge markets. And so, because of that, if you look at every sector -- wind, solar, high-voltage transmission, the most efficient fossil-fuel plants, they're going into the nuclear industry -- you look everywhere, they say, "These are such critical parts of our future that we're going to do everything we can to diversify our energy supply." They're now the second largest -- to be the largest -- importer of oil with the United States. They need to diversify their supply.

They see all these problems, but they also see the fact that the world at large will need these things. They will need solar, they will need wind, they will need high-voltage transmission distribution lines. And so they're generating within their own country, and have generated, the largest renewable market in the world, in their own country. Why? Because that creates manufacturing in their country, and that manufacturing can be used for export.

This is something that the United States should take note of. 10 and 20 years from now, the world's going to need this. Are we going to be buying or selling? Well, we'd rather very much be selling.