As DOE Wraps Up Recovery Act Energy Investments, Does Clean Tech Funding Cliff Loom?
Today marks a milestone for the US Department of Energy and the United States: the official end of the largest investment in the nation's clean energy technology and industries in American history.
Funded by the American Recovery and Reinvestment Act (aka the Stimulus Bill), DOE officially awarded $32.7 billion in grants and contract funding to clean energy and efficiency projects across the country over the past year and a half.
But with Recovery Act funding coming to a close, private financial markets still largely frozen, and Congress increasingly dead-locked overvirtually any new spending measures, can clean energy momentum continue, or is the American clean energy sector poised to tumble off of a clean tech funding cliff?
While some of these programs look more like conventional make-work stimulus -- $5 billion in funding for home weatherization comes to mind -- much of the $32.7 billion in DOE funding can be considered an unprecedented set of investments in America's capacity to innovate, commercialize, manufacture, and deploy low-carbon energy technologies. This is the "Reinvestment" part of the Recovery Act, laying the foundation for a stronger U.S. clean economy and long-term economic growth.
As DOE's Andy Oare writes:
What we have executed under the Recovery Act has been unprecedented. Through our competitive review process, we have selected more than 5,000 recipients for $32.7 billion in grants and contracts. Our program and procurement teams have obligated the funding and recipients have spent more than $7.7 billion (24.5%) of our funds to date. Successful collaboration with Treasury has supported nearly $7.5 billion in additional tax awards, including $5.2 billion in clean energy grants in-lieu of tax credits well as $2.3 billion in clean energy manufacturing. Meanwhile, the Department's loan program has committed more than $15 billion in loan guarantees. Our Recovery Act projects across the country are accelerating technologies spanning the innovation spectrum, building a more competitive U.S. clean energy manufacturing sector and enabling billions in private sector investment.
The question now -- for DOE, Congress, and the country -- is what comes next?
[W]hile the White House report highlights the considerable clean energy momentum established by the Recovery Act, it also inadvertently raises the specter of an impending clean tech funding cliff which risks sending U.S. clean energy industries into deep freeze as stimulus funds begin to expire over the coming months.
To achieve the White House's long-term objectives -- driving down the costs of emerging clean energy technologies such as solar power and advanced batteries and building globally competitive American clean energy industries -- will require a long-term, comprehensive clean economy strategy and sustained investments in innovation, advanced manufacturing, and competitive market deployment.
The question now is this: does the United States and our lawmakers in Washington have the conviction and commitment to enact a real, long-term, comprehensive strategy to build globally competitive U.S. clean energy industries, catalyze American entrepreneurship, and transform the American energy system?
If so, Congress must move quickly to enact long-term investments in U.S. energy innovation, manufacturing, and markets, alongside strong support for energy science and engineering education, enabling infrastructure, and the formation of competitive clean energy clusters.
Meanwhile, our economic competitors aren't about to stand still. China alone is set to unveil a massive $740 billion, 10-year package of direct investments to secure their economic leadership in emerging clean energy industries.
While international competitors surged ahead and the end of Recovery Act energy funding steadily approached on the horizon, we wasted much of the past two years debating failed Congressional cap and trade bills, which would have invested little in clean energy technology had they passed.
So while the stimulus investments were supposed to be a "down payment" on a new clean energy economy, we're now left facing a looming clean tech funding cliff as Recovery Act support for clean energy investment comes to a close.
As DOE's Oare writes:
It is important to remember ... that the work is far from over. ... We are not going to achieve a greener, cleaner future overnight. But we can achieve it soon. That's the reality. We can be competitive in the global marketplace again, and we can once again lead the world in scientific innovation. Our work over the last year and a half through the Recovery Act is a great start. Now, we have to keep the momentum going. The real challenge lies ahead.
The truth is clear: a year and a half of short-term investment does not a clean economy make. Without action soon, the country is poised to default on long-term clean energy promises.
- White House Report: Stimulus Driving Clean Energy Innovation, Manufacturing, Markets - But What Comes Next?
- A Clean Energy Competitiveness Strategy for America
- REPORT: "Strengthening Clean Energy Competitiveness: Opportunities for America COMPETES Reauthorization"
- REPORT: "Rising Tigers, Sleeping Giant: Asian Nations Set to Dominate Clean Energy Race by Out-Investing the United States"
- Atkinson: Investment in Innovation and Manufacturing Critical to US Clean Energy Competitiveness
- Breakthrough Institute Clean Energy Competitiveness Policy Archives
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