Hope for Clean Energy Investments

Clean energy investments to benefit by the stimulus package

Ready or not, the stimulus package is finally signed into law.  Yesterday, Obama finalized the adoption of the American Recovery and Reinvestment Act.  Of the nearly $800 billion that will be doled out in the coming months, about $43 billion is devoted to energy, and another $111 billion to infrastructure and science.  These two categories do not include the addtional $144 billion to states and localities for “fiscal relief.”

While President Obama was very careful to caution Americans that we still have a long road ahead, some are already feeling hope.  Many believe that things will start picking up again soon, especially in the field of clean energy investments, bringing jobs back to those in the construction industry hit particularly hard by the recession.

Was it mere coincidence that the bill was signed into law after the President toured the Denver Museum of Nature and Science, which just happens to have solar panels installed on the roof?  Nah.  Renewable energy investment and green job training is a foundational cornerstone for Obama’s plan to build us out of the recession.

There are several good reasons for hope regarding clean energy investments.  First, half of the money must be spent within 120 days of adoption of the act.  That is a short 4 months. The projects that will benefit from this immediate, substantial investment must be vetted by the government and be “ready to go” within the 120-day time line.  Its crucial to infuse the economy with immediate jobs and pay.  Obama wasn’t kidding when he said there is no time to waste!  With the short fuse, confidence in the economy can be quickly stabilized and we should eventually start seeing other sectors come around.

Second, there are provisions in the law that protect investors, with loan guarantees to minimize risk and get capital flowing again.  Banks are not the only ones shutting their doors and locking the vault.  Private money has been drying up faster than a stream bed in August.  Slowly, we’ll turn that tap back on at a reasonable flow.

Clean energy investment is a calculated risk

In the coming weeks and months, you’ll likely hear people continue to praise and curse the stimulus bill.  But no one has a crystal ball.  The only facts that exist now are the cold, hard statistics (lost jobs, stock market declines and GDP declining).  Against that backdrop, let’s review key provisions of the American Recovery and Reinvestment Act:

* Funding for weatherizing programs (up to $5 billion) and modernization of federal buildings ($2 billion)

* Funding for energy efficiency programs, including $6 billion in grants for state and local governments

* $11 billion to be invested in “smart grid” research and development

* $2 billion to support research for electric car batteries

* $500 million for “green job” training

* Extension of the “production tax credit” for wind energy (plus tax credit extension for biomass, geothermal, landfill gas and some hydropower projects) for 3 years.

Now that the wrangling over the passage of the bill is behind us (for the most part), its time to roll up our sleeves and get to work.  What will happen in the first 120 days?  How much more investment may be required?  Can we kick-start our dream of energy independence with money from the stimulus package?  Is this the silver lining in the deep, dark cloud?