The bankruptcy of a Waltham battery maker, A123 Systems Inc., marks another blemish on President Obama's record for investing government dollars in alternative energy start-ups.
The president had touted A123 as a model of his administration's efforts to fund new American manufacturing capabilities in clean technology. The company was awarded $249 million in federal stimulus funds to help pay for plants in Michigan that were supposed to create 3,000 jobs.
Instead, A123 is the latest in a list of companies that have not lived up to the hopes of the administration.
"Yes, the government is a bad venture capitalist,'' said William Aulet, managing director of the entrepreneurship center at MIT's Sloan School of Management. "That's not what their job is, to be a VC. But the VCs wouldn't have touched some of these businesses that we need as a society to get things done."
Solyndra, Beacon Power Corp., EnerDel, and Abound Solar are other companies that have filed for bankruptcy after receiving stimulus or large loan packages from the federal government. The Department of Energy said A123 has only used $132 million of its grant, and that it still has a stake in the technology's future with its new owners. But the Waltham firm's spectacular stumble was already fueling criticism from Obama's Republican rival, Mitt Romney, who in the candidates' first debate charged that the president squandered $90 billion in green deals and picked mostly "losers."
The actual losses of the government programs have been estimated at about 1 percent, a figure the Energy Department does not dispute. The department said it has supported 1,300 companies through stimulus grants and loans.
But the alternative energy sector is a particularly challenging one, investors and academics said, and could take years to produce positive financial returns.
"These are all areas that the government can and should and invest in,'' said Steve Minnihan, a senior analyst at Lux Research Inc. in Boston. "It's just incomplete to only throw money at the problem."
Minnihan said regulatory changes are also necessary, as well as reforms in electricity rates and the way utilities do business if new technologies are to be adopted more quickly.
Energy Department spokesman Dan Leistikow defended the administration's investments, saying in a blog Tuesday that it had awarded just within the battery sector $2 billion in grants to 29 companies "with strong bipartisan support." The funds were to help build or retool 45 manufacturing facilities across the country.
But two Republican senators, Charles Grassley and John Thune, questioned the government's support of A123 and said they would push the Obama administration for answers about how it decided to invest so heavily in A123, especially in light of the company's recent financial troubles.
The Obama administration has made clean energy a central part of its efforts to create jobs and of the president’s broader energy policy. Obama has pledged both to reduce the country’s reliance on foreign energy sources and to require greater fuel efficiency from carmakers. The $90 billion figure Romney cited is a combination of a number of Obama initiatives, including $29 billion for energy efficiency and $21 billion for renewable generation.
Howard Anderson, a senior lecturer at MIT Sloan and well-known former venture capitalist in Boston, was an early investor in A123, which had its start at the Cambridge university in 2001. He said it was a promising company with talented players. But it's possible the flood of money being offered by states and the federal government ended up being a blessing and a curse, he said.
Of the incentives the state of Michigan offered to the company to build plants there, Anderson said, "At the time, I thought it was the smartest thing because the government was paying for R&D."
Lots of other private investors thought the story was promising, too. A123 went public in September 2009, raising $428 million. Wall Street's Goldman Sachs & Co. and Morgan Stanley led the stock offering, and in 2011, the company raised another $121 million by selling stock.
But in recent months, A123 faced product problems and sought emergency loans from Chinese financiers. The company's financial slide followed the high-profile collapse of Solyndra, a Fremont, Calif., solar panel maker that got a $535 million loan from the government and fired nearly all its 1,100 workers in August.
An electric car battery maker, EnerDel in Indianapolis, used $55 million of its $118 million Energy Department grant before its parent company filed for bankruptcy protection earlier this year. But the parent, Ener1, said the business would continue.
Beacon Power, of Tyngsborough, filed for bankruptcy protection last November after getting a $43 million loan; the Department of Energy said it has recouped about 70 percent of that sum. Abound Solar of Loveland, Colo., a solar panel maker, received about $70 million of a $400 million government loan guarantee before going under in 2011.
Steven Syre of the Globe staff contributed to this report. Beth Healy can be reached at email@example.com.