Legislation Proposed to Hamstring Renewables
Sen. David Vitter (R-LA) is proposing legislation, the "Federal Accountability of Renewable Energy Act," requiring federal agencies to conduct a full audit of any renewable energy projects that received taxpayer money in fiscal years 2009-2011 - the years during which Stimulus Bill support was handed out.
The audit would determine how successful the project is, how many jobs it's created, its profits, and which venture capital firms helped finance it.
Companies that declare bankruptcy or fail to meet the objectives required by the federal government would be subject to an inspector general investigation under the legislation, reports the Hill.
What's Really Happening
"House Republicans are using the failure of Solyndra to launch a political broadside, attacking President Obama and his visionary program to promote energy efficiency, renewable energy and American jobs," says Bob Dean, Natural Resources Defense Council (NRCD).
In fact, green jobs, and solar jobs in particular, are a bright spot in this sour economy.
In 2009, there were 2.2 million green jobs in America, according to the U.S. Bureau of Labor Statistics. By July, 2011, there were 2.7 million, according to the Brookings Institution. Over 100,000 Americans work in the solar industry, employed by over 5,000 companies.
"Last year alone, the US, China, Germany and 17 other of the world's top economic powers invested $243 billion in clean energy technologies, up 30% from the year before. If the global green economy were a country, it would be the 34th-richest in the world, just ahead of Finland," says Dean.
Read his blog, which elaborates on green building, wind and other green jobs.
But Congressional Republicans have signaled they're prepared to start a huge political fight with the White House over renewable energy investments in general, says the Hill.
This fight is likely to compound an already dismal outlook for federal investments in solar and wind because of Republican rancor, despite the fact the US needs to act quickly to compete with China and other countries, which have overtaken the lead on those technologies.
Impact on Solar Industry
Even with the explosive negative press, Ardour Capital notes that core political support and the most critical subsidies aren't vulnerable. The solar industry depends much less on subsidies today because of advances in manufacturing costs which have reduced the price of panels by 70% since 2008. Furthermore, they say, current subsidy structures and the legislative calendar make any near-term subsidy reductions unlikely.
The most critical federal subsidy, the Investment Tax Credit (ITC), appears safe for now. Investors receive a 30% tax credit, currently guaranteed through 2016. There have yet to be serious discussions about reducing or repealing it. As part of the Stimulus Bill, investors have been able to get cash instead of a tax credit. The industry is prepared for that to end at the end of this year.
Yes, the DOE loan guarantee program will be under scrutiny, but it may be too late to rescind funds. Most of the funds, $17.7 billion, have already been allocated through closings and conditional commitments. 97% of the $10.3 billion in conditional commitments are for relatively low risk renewable electricity generation projects, notes Ardour.
If Congress wants to rescind those funds, the logical opportunity would be in late November when the Joint Select Committee on Deficit Reduction must reach an agreement on $1.6 trillion in cuts. But by the time Congress votes in December, most of the conditional commitments will be closed.
Despite the recent bankruptcies, solar remains on track for record growth in 2011. While uncompetitive companies like Solyndra, Evergreen solar and Spectrawatt are gone, industry leaders are becoming more mature and mainstream as evidenced by Total's acquisition of controlling interest in Sunpower. The larger picture shows the solar industry is growing rapidly - and creating lots of jobs.
In conclusion, Solyndra's loan represents a tiny fraction of DOE's stimulus program, which is designed to finally jump start renewable energy in the US. And support for renewable energy is dwarfed by that for fossil fuel and nuclear companies. There's nothing unusual about government support for emerging, innovative technologies, and it's not unusual that some of them fail. Since Solyndra is the only recipient that's failed so far, we could just as easily say the program a great success.
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Read our coverage of the growth of the US solar industry.
Rona Fried, Ph.D. is CEO of SustainableBusiness.com, providing daily news and green jobs online since 1996.
