President Obama on Tuesday signed a bill that cuts an additional $1.5 billion from the funding pool for the Department of Energy's (DOE) renewable energy loan-guarantee program.
The funds were shifted as part of a $26.1 billion package to cover teacher salaries and Medicaid, according to the Solar Energy Industries Association (SEIA).
$2 billion was "borrowed" from the fund in 2009 to help pay for the "Cash for Clunkers" rebate program. That money has yet to be returned. As a result, only $2.5 billion remains in the program.
SEIA estimates there are currently 81 renewable-energy project applications--totaling $31 billion in lending authority--in the loan-guarantee pipeline. DOE is expected to be able to fund project applications totaling only $25 billion.
"This reduction in funding severely limits the DOE’s ability to support the suite of renewable resources through the loan-guarantee program," SEIA and other renewable energy associations wrote in a letter to House Speaker Nancy Pelosi. "Further, a solicitation for manufacturers of commercial renewable energy technologies has not even been released yet by DOE."
The website Industrial Fuels and Power made the observation that the funding shift suggests trouble for the U.S. economy as a whole: "If large-scale investment in projects designed to improve the nation’s energy security are being curtailed to support regular expenditure at the state level, then the gap in the country’s finances can only be expected to widen going forward."
