Stimulus Bill Funds Still Not Reaching Cleantech

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cleantechThe stimulus has had an underwhelming impact on the cleantech sector.  Very little of the $36.7b of The American Reinvestment and Recovery Act (ARRA) allocated $36.7b to the Department of Energy (DOE) has gone to cleantech.  Nuclear waste cleanup projects and state governments have received most of the money to date.  Cleantech funding has been negatively impacted by delays at the state level and states reallocateing funds to address shortfalls in state budgets.

by Robert Lahey is the Senior Legislative Analyst at Ardour Capital Investments, LLC.

Most of the $787b stimulus bill funds have been spent, but the impact on cleantech has fallen below expectations. The American Reinvestment and Recovery Act (ARRA) allocated $36.7b to the Department of Energy (DOE), but as of June 2010 only $4.5b has been spent and most of it did not go to cleantech companies.

Nuclear waste cleanup projects and state governments received a majority of the DOE’s stimulus funds spent to date. The nuclear waste projects, which have received $2.1b, have nothing to do with renewable energy or energy efficiency. State governments, which have received $1.3b to date, are supposed to benefit cleantech through Energy Efficiency Conservation Block Grants, Weatherization Assistance, and State Energy programs. However, we are seeing the potential impact on cleantech diluted because of delays at the state level. Also, many states facing significant budget shortfalls are likely to spend a portion of the funds on programs unrelated to energy.

Programs that directly fund cleantech companies have announced significant awards, but the money has not been dispersed. Excluding state nuclear cleanup and state programs, $11.5b has been awarded but not spent. These programs are the most attractive for cleantech companies because there are no state intermediaries to delay or supplant funds. Smart grid companies will benefit significantly as utilities receive $3.9b in matching funds to be spent on smart meters and demand response.

The loan guarantee program remains the most well funded and elusive ARRA opportunity. It is sitting on $3.9b in funding (99% unawarded) which can be used to support $34b in loans to cleantech companies ranging from equipment manufacturers to project developers. This program is having serious trouble getting off the ground and we expect that a majority of the funds will remain unspent well into 2011.

Progress in the loan guarantee program has been greatly exaggerated. Only one cleantech company has ever received a loan (Solyndra), and the 7 companies that have been conditionally approved are applicants from 2008. Conditional approval is a positive step forward in the process, but it does not mean the loan is certain to occur. The absence of real loans is remarkable considering that the program was established in 2005 and has been accepting applications since 2007.

Delays are attributable to personnel deficiencies in terms of quantity and quality (limited finance and private sector experience), new restrictions on lobbyists, stringent credit requirements, and mandatory environmental studies that move at a snail’s pace.

The Treasury Department grant program is a brightspot for cleantech. Renewable electricity project developers applying for these subsidies are exempt from many of the DOE’s most burdensome requirements. Since this program was launched in August 2009, it has given out $3.6b to 671 projects.

While slow progress of ARRA spending is a near-term negative for the sector, we remain optimistic for the long-term impact. The size of these spending programs is unprecedented for cleantech space, and we look for them to have a potentially game-changing affect on the US market.

© 2010, Tracey de Morsella. All rights reserved. Do not republish.

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Author: Tracey de Morsella (323 Articles)

Tracey de Morsella started her career working as an editor for US Technology Magazine. She used that experience to launch Delaware Valley Network, a publication for professionals in the Greater Philadelphia area. Years later, she used the contacts and resources she acquired to work in executive search specializing in technical and diversity recruitment. She has conducted recruitment training seminars for Wachovia Bank, the Department of Interior and the US Postal Service. During this time, she also created a diversity portal called The Multicultural Advantage and published the Diversity Recruitment Advertising Toolkit, a directory of recruiting resources for human resources professionals. Her career and recruitment articles have appeared in numerous publications and web portals including Woman Engineer Magazine, Monster.com, About.com Job Search Channel, Workplace Diversity Magazine, Society for Human Resource Management web site, NSBE Engineering Magazine, HR.com, and Human Resource Consultants Association Newsletter. Her work with technology professionals drew her to pursuing training and work in web development, which led to a stint at Merrill Lynch as an Intranet Manager. In March, she decided to combine her technical and career management expertise with her passion for the environment, and with her husband, launched The Green Economy Post, a blog providing green career information and covering the impact of the environment, sustainable building, cleantech and renewable energy on the US economy. Her sustainability articles have appeared on Industrial Maintenance & Plant Operation, Chem.Info,FastCompany and CleanTechies.

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  • http://www.recyclematch.com/ BrookeBF

    Thanks for shedding light on this. My particular clean-tech niche is leveraging the internet to accelerate commercial recycling and help companies and organizations achieve zero waste (http://www.recyclematch.com/). People rarely think about it, but reuse, upcycling and recycling save a great deal of energy, water and resources compared to sourcing virgin materials.

    We consistently see grants from the EPA that would be a great fit for us. Except that they are all written to exclude for-profit businesses from participating! Arghhh! That makes me so frustrated! We are trying to build an economy and healthy jobs. Why on earth would they exclude for-profit businesses?

    @BrookeBF from @RecycleMatch