Solar energy funding stalls in the US Senate16. March 2012 | Industry & Suppliers, Markets & Trends | By: Cheryl Kaften
Proponents of the U.S. Department of Energy (DOE) loan program took a tumble on the Hill this week – as Republicans ratcheted up election-year resistance to both solar grants and renewable energy subsidies.
On Tuesday, March 13, a measure that would have reinstated the U.S. Department of Treasury's Section 1603 program was defeated, 49-49 in the U.S. Senate. The Energy Tax Extenders amendment, sponsored by Sen. Debbie Stabenow (Democrat-Michigan), lacked the full 60 votes it needed to pass the roll call.
Commenting on the failure of the Senate to support the amendment, the Solar Energy Industries Association wrote: "Americans overwhelmingly want more solar energy. Unfortunately, the U.S. Senate just voted for less."
Although the vote was hyped as a major defeat for the solar industry, there still is hope that Section 1603 can make a comeback. President Barack Obama's proposed fiscal-year 2013 budget would fund an extension of the program, but that, too, must come through consideration by Congress.
According to a report published by Bonn-based EuPD Research last October, a one-year extension of the 1603 program would create an additional 37,000 jobs during 2012 in the solar industry, alone. What’s more, it would result in nearly two additional gigawatts (GW) of solar installations above baseline by 2016.
Few are surprised, but many are frustrated that the program has languished since last December. DOE funding for the renewable energy sector has been widely second-guessed – accused of a lack of due diligence and an overarching political bias – since California-based solar-panel manufacturer Solyndra squandered a US$535 million Section 1705 loan guarantee from the Department of Energy and declared bankruptcy last September.
Some of those accusers were in attendance at a U.S. Senate Committee on Energy and Natural Resources hearing on Wednesday, March 14, where Section 1705 of the Energy Policy Act of 2005 was on the agenda and two experts were on-hand to testify: Energy Department Secretary Steven Chu; and Herb Allison, author of the "Report of the Independent Consultant's Review with Respect to the Department of Energy Loan and Loan Guarantee Portfolio."
Although Democrats on the committee stressed the need for America to remain competitive in the global energy market, the themes of risk and reconsideration ruled the day.
Committee Chairman Sen. Jeff Bingaman (Democrat-New Mexico) addressed the political climate at the start of the session. He remarked, "It’s not enough to have the innovative research that our national labs and universities conduct; there also needs to be a pathway to turning those ideas and inventions into profitable companies. … If we want to ensure that taxpayers lose no money, then it’s easy enough to just eliminate government support for American efforts to compete in developing and deploying these new technologies. Unfortunately our efforts to support domestic players … have been caught up with many election year issues."
Speaking next, Ranking Member Sen. Lisa Murkowski (Republican-Alaska) demurred, "I don’t want to take my time today to add to the narrative of public scandal and controversy that the [DOE] is already confronting." However, she was quick to add, "I would just offer this: Hard questions need to be asked and to be responded to in full. These programs should be examined and I think that they should be improved. That’s an appropriate role for Congress and more specifically, this committee."
Murkowski eloquently expressed her dissatisfaction: "We didn’t expect every single project the [DOE] supported to be a roaring success, but we also didn’t expect to see an accumulation of failures so quickly."
Sen. Rand Paul (Republican-Kentucky took the opportunity to bring up the S-word during a subsequent verbal duel with Allison: "My question to you would be, 'Did anyone from the administration ask you either verbally or in writing not to mention or to look at Solyndra?'"
Allison replied, "The direct answer to the question is no."
Paul then expanded on his premise: "If you are going to strengthen oversight, certainly you have to look where the problems are. This seems to be so myopic as to be politically motivated. I am very skeptical of why you [didn’t] look at Solyndra when that’s the whole reason you were commissioned. Here’s the thing: You’ve got Solyndra; you’ve got [Cleburne-Texas-based] Beacon Energy going bankrupt; you’ve got [Oakland, California-based] BrightSource maybe going bankrupt…. BrightSource got [$1.6] billion dollars from this loan."
In relation to BrightSource Energy, a player in the concentrated solar power sector, Paul could not contain some political venom: "Who owns BrightSource? Robert Kennedy, Jr.—another politically connected Obama contributor …. And why are we giving money to a family that’s got hundreds of millions of dollars? This is about crony capitalism. This isn’t about starting up solar panels. It’s about giving money to people who already have got enough money. Let them make their own loans, if they love solar panels."
The hearing ended without any substantial encouragement for the solar industry. Sen. Al Franken (Democrat-Minnesota) put his own spin on the situation in a closing statement: "We want to be competitive in these technologies, which are clearly going to be an enormous part of our economy and the world economy, and the world energy economy – and ignoring that to me seems kind of willful in not understanding where the world is going."
Where the world is going is never a certainty. But in this election year, Americans will flock to the polls. They will vote for the candidates and platforms that support their opinions, including their attitudes on renewable energy funding. Therefore, if the Congress doesn’t take action, the U.S. public just might influence the outcome.
The 1603 Treasury program was created under the American Recovery and Reinvestment Act of 2009. The program enabled the owner of commercial solar property to receive a 30 percent grant, in lieu of taking the solar Investment Tax Credit (ITC). Under the rules of program, applicants were eligible for 1603 only if they commenced construction on projects by December 31, 2011.
Section 1705 authorized loan guarantees for certain renewable energy systems, electric power transmission systems and leading-edge biofuels projects that commenced construction no later than September 30.
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