It has been shown that the main problems of the circuit theory of solar flares -unlikely huge current growth time and the origin of the current interruption -have been resolved considering the case of magnetic loop emergence and the correct application of Ohm's law. The generalized Ohm's law for solar flares is obtained. The conditions for flare energy release are as follows: large current value, > 1011 A, nonsteady-state character of the process, and the existence of a neutral component in a flare plasma. As an example, the coalescence of a flare loop and a filament is considered. It has been shown that the current dissipation has increased drastically as compared with that in a completely ionized plasma. The current dissipation provides effective Joule heating of the pIasma and particle acceleration in a solar flare. The ion-atom collisions play the decisive role in the energy release process. As a result the flare loop resistance can grow by 8-10 orders of magnitude. For this we do not need the anomalous resistivity driven by small-scale plasma turbulence. The energy release emerging from the upper part of a flare loop stimulates powerful energy release from the chromospheric level.