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Renewable Energy Stimulus Plan Update

February 5, 2009 | 18 Comments

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Washington, D.C., United States [RenewableEnergyWorld.com] The U.S. Senate is expected to vote on Friday on its version of the American Recovery and Reinvestment Act of 2009, the stimulus package that the House of Representatives passed last week by a vote of 244-188.

" Negotiations are likely occurring behind the scenes to determine how the bill can be modified to gain the necessary votes."

-- Greg Jenner, Partner, Stoel Rives

Differences between the House-passed bill and the Senate version in debate involve different funding levels for various technologies and programs. Since the bills are still in discussion, there are no concrete predictions about how the final dollars will play out, but here's where it stands right now.

Energy, Efficiency and Transmission ($53.8 billion Senate, $48.9 billion House)

Senate version (House version in parentheses)

$14.4 billion for energy efficiency and renewable energy programs ($18.5 billion in House version, which includes $6.2 billion to expand existing weatherization activities and $7.9 billion for energy-related grants to states)
$10 billion to cover the subsidy costs of federal loan guarantees for renewable energy systems and electric transmission projects ($8 billion in House version)
$6.5 billion for federal power marketing administrations to build new transmission systems (same in House version)
$4.6 billion for R&D on carbon capture and sequestration ($2.4 billion in House version)
$4.5 billion to modernize the nation's electricity grid with smart grid technology (same in House version)
$7.8 billion for environmental remediation and various other activities ($6.4 in House version)

Renewable Energy Tax Credit Extensions ($13 billion Senate and House)

The bill in both the House and Senate would provide a three-year extension of the investment tax credit for renewable energy production from various qualifying facilities, including wind, biomass, geothermal and hydropower facilities.

Tax Breaks for Large-scale Renewable Projects ($11 billion Senate and House)

Companies will be able to take what is known as a "carry-back" under the Senate version of the bill. This is a tax credit against prior profits. This could be a large help to investors in projects such as banks and other investment firms that are not currently in the black.

In the House's bill, the "carry back" provision also exists and is further extended to give companies the option to receive a grant from the U.S. Department of Energy (DOE) instead of claiming the ITC and the PTC. This change would only effect projects placed in service in 2009 and 2010 that qualify for the ITC.

These House-proposed federal grants are akin to a refundable tax credit. The dollar amount given under the grant program would be equal to the ITC amount that the owner of the project could have otherwise claimed. In most cases this would be 30% of the qualified cost of the project. The Senate version of the bill left out this proposal.

Renewable Energy Manufacturing ($1.4 billion Senate)

Under the Senate version of the bill companies that manufacture renewable energy related equipment (i.e., wind turbines and solar panels) could receive a tax credit equal to 30% of the new investments in plants or machinery. This is one of the provisions that the Senate believes will help create jobs by luring more manufacturers to set up shops in the U.S as opposed to overseas. This House version currently doesn't have this provision.

Energy Efficiency Improvements ($10.7 billion Senate, $8.7 billion House)

This money would be used to make energy efficiency improvements to federal buildings and vehicle fleets.

Defense Energy and Efficiency Programs ($3.4 billion Senate, $4.5 billion House)

These funds would go to the Department of Defense for the repair, maintenance and renovation of its facilities; for energy-efficiency projects at those facilities; and for the leasing of renewable-energy vehicles. It would also fund energy-related R&D as well as the procurement of components to be used in vehicles that utilize renewable-energy technologies.

Advanced vehicle grants ($2 billion Senate)

Advanced battery system manufacturers would benefit from the Senate's bill, which provides loan guarantees for technology that advocates of the provision say will help the U.S. consume less oil.

Greg Jenner, a Partner at Stoel Rives said that the bill may not pass the Senate.

"As to the current state of the bill, action on the Senate floor so far indicates that there might not be enough votes in the Senate to pass the bill. As a result, negotiations are likely occurring behind the scenes to determine how the bill can be modified to gain the necessary votes. Meanwhile, angry voters are calling their representatives to complain, which will increase the political pressure for significant changes. While everyone acknowledges that a bill will pass in some form, it is not likely to be the version we see now," he said.

Stay tuned to RenewableEnergyWorld.com for more updates on the stimulus plan.

Bioenergy, Geothermal Energy, Hydrogen - Fuel Cells, Ocean Energy, Solar Energy, Wind Power, Energy Efficiency

18 Reader Comments

Comment
1 of 18

f-berry-47814

February 5, 2009

Pull our people out of the war; have the world watch to see what happens once we move out. If traction is lost,....ALL democratic governments MUST MUSTER up a 'set of balls' this time and get the work done.

Then,...we invest our money on our national infrastructure while our Saudi
friends change their' core beliefs at the same time, by building net energy and smart cities, etc.

People in the middle class; average 2.3 kids making less than 50K a year cannot take: vacations, live well, keep up on their homes, or EVER retire as our society now exists with cost structures.

One needs to make 65-75K a year to save any money in the MIDDLE Class today. Jobs simply don't pay these incomes any longer; with few exceptions.

Best,
FB

Comment
2 of 18

sherry-jan-156046

February 5, 2009

We need to do everything in our power to reduce our dependence on foreign oil.We have so much available to use such as wind and solar as well as technologies to reduce our dependence on fossil fuels. There could be no better investment in than to invest in energy independence. Create clean cheap energy,create millions of BADLY needed new green jobs, and reduce our dependence on foreign oil.The high cost of fuel this past year did serious damage to our society and economy. Record numbers of jobs and homes have been lost due to the direct impact on our economy.Oil is finite.We are using it globally at the rate of 2 X faster than new oil is being discovered. Added to the strain on our supplies foreign countries are bursting in populations and becoming modern.China and India alone are expected to add another 3 million vehicles to their highways in the next 2 decades.

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3 of 18

natalie-villella-18262

February 6, 2009

Geothermal in played out oil wells (like Texas) presents probably the most garnerable Renewable Energy resource for immediate implimentation, and where these site also have Wind and Solar resources the combination of these would allow for power production across the board where wind or solar fluctuate. Likewise, adding wind and/or solar to Hydro facilities (where appropriate) also utilizes existing infastructure to put in place near term expansion of renewables.

Stand alone Wind, or stand alone solar production facilities (or project planners) might do well to see what synergy may be available through multiple input (and output) systems, frontend multi-input design being preferable to retrofit.

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4 of 18

paul-tousignant-111847

February 6, 2009

This one is a COMPLETE waste of money:
"$4.6 billion for R&D on carbon capture and sequestration ($2.4 billion in House version)"
We DON"T need it because global warming is based on flawed science and theory.
That money would be better used for building WtE plants - THAT is stimulus!

Comment
5 of 18

mike-holly-17241

February 6, 2009

The US is not ready for this bill. There has been little planning on how to spend the money. The renewable energy sources must be made clear. Then grid planning must take place. The electricity industry is still monopolized in both regulated and deregulated markets. If RPS are used, the utility monopolies, who don't even like renewable energy, will select how the renewable mandates are met.

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6 of 18

collinar

February 6, 2009

Companies like nanosolar and innovalight claim they can profitably sell solar power for the same cost as a coal power plant. If the amount of money we spent on imported oil last year ($700B) were used to purchase these cheap solar solutions, we would not need imported oil. We would need a lot of Chevy volts, and Phoenix electric pickup trucks.

Comment
7 of 18

mel-zimmer-64262

February 6, 2009

same old same old.
Big Wind Farms and expensive, dangerous grids.
Why not spend to make every home energy independent?
Cause the good old boys wouldn't get their cut.
There is no hope.
But never fear, Clean Coal, the world's largest oxymoronic murderers, will continue their Mountains to Mesas program under the ever vigilant watch of the lesser of two evils. But then we only get two choices.

Comment
8 of 18

luke-divemaster-154368

February 6, 2009

Give layoff notices to all senators and representatives (vote them out) that don't support renewable energy but do support the military-industrial death machine. Make energy independence not war.

Comment
9 of 18

collinar

February 6, 2009

We do not need the "good old boys" permission to be energy independent. All we need is for Home Depo and similar distributors to buy wholesale from manufacturers Nanosolar and Innovalight, and sell solar collectors to the public at discount prices. Both companies are already shipping commercial product; but they stil need to ramp up productin to TeraWatt levels.

Nanosolar has a $1,000,000 roll-to-roll printing press that can turn out from 1GW to 20GW per year (depending on how fast they spin it). If they built 200 of these for $200M, and ran them as full speed; they could churn out 4TW of collectors in one year.

That is more than enough to cover the roof of every building in the US.
What energy crisis?
The only crisis is lack of action.

Comment
10 of 18

gary-wainright-71403

February 6, 2009

Sales of pv systems would be greatly assisted if some changes could be made to the HUD Title 1 home improvement loan program. It offers potentially great benefits to the res. pv industry but is not without problems.

On the + side, owners can give lenders 1st, 2nd or 3rd mtgs. Although subordinate mtgs. afford rather precarious security to lenders, they could presumably also require 1st-priority UCC-1 purchase-money fixture filings on systems that would enable them to repo them in the event of non-payment.

Also helpful is the fact that home equity is not required.There are several reasons for this. Owners are basically substituting a loan payment for all or a portion of their electricity payment, which makes it more or less a wash on monthly expenses. Lenders who take a UCC-1 fixture filing are not really relying on the rest of the house as collateral. The lack of an equity requirement eliminates any need for an appraisal and is enormously helpful at a time when home values are falling.

Approval is fast, fees & rates are low, & there are no prepayment penalties. The latter feature is important because it permits lenders to borrow the entire cost of the pv system & installation and then pay down the loan when they receive their fed. credit and state & local incentives.

Nevertheless, major problems exist. Lenders must apply to HUD, pay app. & ann. fees for each branch where loans are originated and have onerous territorial restrictions. In some cases, they are prohibited from making loans outside counties where their main branches are located. I am located in coastal GA, & we do not have even 1 approved lender south of Atlanta. Jax, FL lenders are restricted to Duval Co.

Loans are limited to $25,000. While sufficient for small homes, this can be a serious obstacle for larger ones.

If these 2 problems can be solved, this program could be a godsend to pv sales. The Obama administration should modify the stimulus package to eliminate these roadblocks.

Comment
11 of 18

john-sanden-162948

February 6, 2009

How about tax breaks/credits for green energy companies that put people back to work. (Green Collar Workers IE: contractors, sales reps., installers, etc...). I heard that the state of Maryland is doing something like this, and other states are to follow. This will also help green companies grow through investment $$$ and stimulate our economy as well. (Any thought on this)?

Comment
12 of 18

hifive5

February 6, 2009

Channel all the bureaucratic hot air into geothermal generators and rollback the tax rate to 1913 levels, that's how we'll stimulate the economy. Cheers!

Comment
13 of 18

mike-holly-17241

February 8, 2009

Let us not forget that Obama's so-called economic stimulus bill is not just bad energy policy, favoring large special interests, but it is also bad economic policy.

Republicans are to blame for causing the current economic collapse, and the Great Depression before it, by favoring monopolies, big business and the wealthy. Their policies squeezed the masses between relatively low wages and high taxes and prices. In each case, the Federal Reserve was forced to try to maintain the standard of living by expanding the money supply, which produced unsustainable credit-driven booms. Eventually, consumers' credit runs out, especially since the debt financing from the savings of the wealthy is at high interest rates. When markets fell, brokerage firms, that lend money on the margins (e.g., several dollars for every dollar an investor deposits), called in loans, which could not be paid back. Banks fail as debtors default on debt.

Like they did during the Great Depression, Obama and the Democrats are making sure the depression continues until world war. Not only will they continue to support Big Business, but now they are piling on top of that support for Big Government and Big Labor. They are moving toward a planned economy including the grid. Interference in the economy helped cause the depressions, and government efforts to prop up the economy after only makes things worse by delaying the market's adjustment. We need a new political party that favors free markets or feed-in tariffs, small business, the middle class and antitrust.

Comment
14 of 18

mike-holly-17241

February 8, 2009

The Economic Stimulus Plan (or Obama energy plan) must be rejected before it further destroys the US economy. For decades, government policies favoring monopolies, big business and the wealthy have lowered standards of living and greatly expanded debt. The two major political parties can now only survive by creating economic bubbles (boom and busts) to boost short term prosperity at the expense of the future. (If you don't believe me, read Eric Janszen's article "The Next Bubble" in the February 2007 issue Harpers Magazine.) Clinton used policies to create a high tech bubble that later damaged the economy along with the industry. Then, Bush did the same with housing. Now, Obama is doing the same with clean energy and infrastructure, starting by ramming through desperate and wasteful spending. The utility monopolies and their friends in the renewable energy industry, especially wind, have sold out for the quick bucks. In a few years, they will leave the renewable energy industry and economy in shambles. Another more incredible bubble will be needed in the face of even greater debt. Eventually, the boom and busts will end in a long depression. The longer it takes, the worse it will be - like a Bernie Madoff ponzi scheme.

Comment
15 of 18

john-dye-169531

February 9, 2009

Paul T. is 100% right that the billions set aside for carbon sequestration is a complete waste of money, but he is 100% wrong about the reason. Global warming/climate change and related sea-level rise is a verified scientific FACT. It's plain common sense that you can't pump billions and billions of TONS of greenhouse gases into the atmosphere, as we've done over the past 100+ years, and have it NOT affect global temperatures. The reason the money is a waste is because "clean coal" is the ultimate oxymoron. Even if we could develop technology that could somehow capture carbon emissions (and even the most optimistic acknowledge that such technology is 10+ years away from a feasible prototype), we have no place to "sequester" it. Even worse, carbon sequestration would just create a seismic time bomb -- tremors, earthquakes, accidents, and shifting tectonic plates would result in release of sequestered gases. Finally, and worst of all, coal is responsible for pumping tons of mercury and other highly toxic substances into the environment. Capturing carbon does nothing to capture these extremely dangerous emissions.

STOP COAL, GO RENEWABLE, GO GREEN!

Comment
16 of 18

david-daniels-170253

February 11, 2009

Clearly the US only benefits from a greater emphais on renewable energy. How this bill directly will provide an effective support platform to do this, is not clear. What will continue is fundemental miss direction of incentives in regards to securing sustainable, deployable, renewable energy.

Solar and Wind dominate the press excepting the brief escalation of focus on the liquid fuels. Numerous, documented, new technology, developmental efforts are underway, and surely some will pan out. It is understandable the surface appeal of technologies which operate "with free fuel". But that is not a true statement, the cost is spent on the infrastructure to gather that which is free. The fact is there is not, presently, one right answer.

What we don't see and havent seen is a pragmatic focus on utilization of biomass in a reliable, cost effective and environmentally friendly basis that can be deployed today. Straight forward systems that "burn" biomass will and should carry emissions concerns and find critisisms in most corners. However systems employing two stage combustion (hybrid gasification) operate very cleanly, are efficient and can modulate to loads imposed. Best of all, we can install and use them today applying thermal energy produced or converting it to electricity or both. And the definition of useable biomass is much broader than wood, it simply requires these more sophisticated systems to take advantage of them.

Affirmation of this is evident in Europe, South America, Easter Europe but less in America. As one contributor pointed out, there really isnt a better investment than pursuit of energy indpendance; but this means starting now using solutions that will pass todays risk and return models.

What we need is a background of real recognition of and economic support for those that make the commitments to start using renewable biomass today with sensible requirements on efficinciey and reliabiltiy.

Comment
17 of 18

henry-maclin-169818

February 14, 2009

John Dye. I am on your side with renewable energy. My company makes equipment to change biomass waste to bio oil. This is a direct replacement for boiler/burner fuel. But you do none of us good with claims that are not fact. Our world ( which I believe was created by God) is balanced by 4 laws of energy. The reactions controlled by these laws are always heading towards equilibrium. Matter is not created or destroyed but changes state. Areas of the globe that have more CO2 bring about more aggressive growth rates in plants. You can test this fact with a simple terrarium. Pump in all the CO2 you like and watch how fast the things grow. Plants as you know breath in CO2 and breath out O2 keeping the carbon as the building block that when burned we see in charcoal. Some tree types that take 25 years to maturity in the U.S. take less than 12 in Argentina. I am green and support a low impact human interaction with nature. A tempered position with bring more understanding than one inflamed by passion not science.

Comment
18 of 18

mweide

May 9, 2009

I represent a firm that is seeking grant funds to produce a new wind turbine design and prototype. Further, we intend to construct a large windfarm in Wisconsin. Have contacted Grants.gov and will apply in September for PH I funding. In the mean time, where is "Stimulus" funding for such an enterprise?
Thanks

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