Federal Investment in Clean Energy Underutilized and Declining

Several reports, assessments, and plans have been released related to energy development — particularly clean energy. On March 15, both President Obama's Blueprint for a Clean and Secure Energy Future and the Government Accountability Office's review of the Department of Energy's loan programs were released. In addition, the Information Technology and Innovation Foundation published their report on recent trends in federal investment in clean energy, specifically from the American Recovery and Reinvestment Act of 2009.

The president's Blueprint calls for $2 billion over the next 10 years for research on domestic natural gas and biofuels, fuel cells, and electric cars. Specifically, the plan calls for the doubling of renewable sources of energy, such as wind, solar, and geothermal by 2020, respective to 2012 levels, as well as making the renewable energy Production Tax Credit permanent and refundable. This year's presidential budget request will include a 20 percent increase for the Department of the Interior's energy program, with a focus on improving the permit process for oil, gas, renewable energy, and infrastructure. The budget request also will call for more than $40 million for research into safer natural gas production, and an additional $375 million for cleaner fossil fuel energy, clean coal technology, and a prize for the first integration of carbon capture and storage into a natural gas power plant.

The Government Accountability Office reviewed the Department of Energy's Innovative Technology Loan Guarantee Program (LGP) and Advanced Technology Vehicles Manufacturing (ATVM) loan program. The LGP is targeted to provide loan guarantees for innovative clean energy projects and the rapid commercialization of improved energy technologies, while the ATVM is intended to provide loans to support the development of vehicles and components that would increase the fuel economy of American vehicles. Together, at the end of January 2013, the programs had $51 billion in unused loan and loan guarantee authority and an additional $4.4 billion in unused credit subsidy appropriations. Further, there are no outstanding applications for ATVM loans, but thirteen applications totaling $15.1 billion are under consideration for LGP loans.

The report "Breaking Down Federal Investments in Clean Energy" by the Information Technology and Innovation Foundation found that between 2009 and 2011, specifically after the passage of the American Recovery and Reinvestment Act, the trend in investments in procurement and deployment of clean energy technologies increased nearly 400 percent. Technology procurement and deployment now represents 63.8 percent of the clean energy innovation budget. In total, investment in clean energy has fallen nearly $8 billion from FY2010 to FY2012, with demonstration projects falling from 6 percent of total funding in FY2010 to 0.2 percent in FY2012, representing a 97 percent decrease. Further, federal investment in clean energy manufacturing decreased 92 percent between FY2009 and FY2012. Overall, there has been a shift away from demonstration and manufacturing investments towards procurement and deployment of clean energy technologies.

However, despite a decline in federal investments in clean energy and manufacturing, solar energy added 3,313 megawatts of power in 2012, representing a 76 percent increase over 2011. California alone installed more than 1,000 megawatts of solar power, which would power 626,000 homes in the state. Other top installing states were Arizona, New Jersey, Nevada, and North Carolina. Overall, the United States accounted for 11 percent of global solar energy installations in 2012, its largest market share in fifteen years.