It's the disruption of risk
Normally your comment about utility scale projects would be accurate, if no government loans guarantees are involved. As you said, averaging costs over time minimizes random events and makes risk more predictable. Because both parties are fully exposed if they make an error, they tend to be very conservative in their cost and time-to-market estimates.
But when you take away risk because of a government loan guarantee, long-term projects are just as prone to making poor choices as we did with Solyndra. If I'm an utility and the government gives me a 100% loan guarantee on a long-term project, why not ignore all caution and just build it? What's my downside? The government will pay up anyway. Even if I don't get a 100% loan guarantee, but say, a 50% loan guarantee I'll be a little bit more cautious but still a lot less likely to care about how accurate my estimates are.
Removing the risk in mortgages via government-backed financing from Fannie and Freddie was how we got the housing bubble. Nobody cared about the credit worthiness of borrowers, they just made the loans because the money came from Fannie and Freddie which would just go to the government if the loan failed. The big financial institutions then bought securities based on these mortgages, because deep down they knew that if the securities failed, they were "too big to fail" and the government would bail them out. And with the exception of Lehman Bros. that's exactly what we did.
Removing risk with government guarantees is a drug. It always seems to have great short-term advantages (you get a house, and you get a house, and we all get a house!!), but in the end it will kill you.
