Clean energy industry looks ahead

By Juliet Eilperin and Steven Mufson
Washington Post Staff Writers
Sunday, October 24, 2010

The billions in federal stimulus dollars spent on expanding "green energy" industries and creating "green jobs" have provided a lifeline for U.S. wind and solar companies, but renewable-energy executives are worried that the future will not be as promising.

President Obama frequently points to these wave-of-the-future jobs as one of the substantial achievements of his administration, and wind and solar executives say that the economic stimulus bill turned 2009 into a banner year instead of a catastrophic one for their businesses.

But limited funding in one area, a slow ramp-up in another, prolonged negotiations over loan guarantees and the continuing economic slump have made it difficult for the industry to make the kind of progress Obama and many others had hoped for and imagined. As a result, the president does not appear to have gotten much political credit for new green jobs, despite his many visits to battery, solar and wind facilities aided by the stimulus package.

Adding to the uncertainty, industry officials say their businesses could contract sharply unless a key tax subsidy, set to expire at the end of the year, is extended.

"In the short term, did this recovery program make new jobs in the clean energy sector? I think the answer is yes," said Joshua Freed, director of the clean energy program at the think tank Third Way. "What does that mean when we look back in two or three years? It takes awhile to figure out the conclusion of this story."

The White House, however, has already declared the program an unqualified success. The Council of Economic Advisers issued a report in July that found the American Recovery and Reinvestment Act's more than $90 billion in total spending and future tax breaks produced 190,000 "clean energy" jobs in the first quarter of 2010. A recent Lawrence Berkeley National Laboratory study found that the act's $5.4 billion in investment tax credits have created or saved 50,000 jobs in the renewable sector.

Critics say that the same money could have been used to create more jobs or to produce them faster, but Obama administration officials say the clean energy positions are not the same as other jobs, such as road work.

"The recovery act was a diversified portfolio of actions. Some items were designed to be faster but didn't have as much bang for the buck," said Jason Furman, deputy director of the National Economic Council. "These are the types of jobs where they tend to be higher paying. They tend to be longer lasting."

Success rates

The effectiveness of the stimulus money for energy has varied widely from one basket of money to another.

One highly touted program in the Energy Department's portfolio - a loan guarantee program for renewable energy projects - has shrunk from $6 billion to $2.4 billion. The White House directed 60 percent of the funding to unrelated areas, such as an education measure and the "Cash for Clunkers" incentive for people to replace old vehicles.

The Energy Department also needed time to gear up; the $32.7 billion it was charged with handing out is substantially more than its previous annual budgets. With spending deadlines approaching, the department has picked up its pace of grant- and loan-making, shoveling $8.2 billion out the door in September, according to department officials, much of it to state and local governments for energy efficiency programs.

Before the recovery act, the Energy Department did not have a loan guarantee office. It has hired 200 employees and contractors. But Rhone A. Resch, president of the Solar Energy Industries Association, said that many companies have waited 19 months for decisions.

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