The Department of Energy has just rolled out a new ten-year plan aimed at making cost-competitive solar and wind power a reality. The initiative includes $27 million for nine solar tech projects, and up to $50.5 million to support offshore wind development. It can’t be a coincidence that the announcement took place just one day after President Obama spoke before the U.S. Chamber of Commerce, an organization that pumped millions of dollars into the last election cycle in opposition to his energy policies (among other things), so let’s pick apart just what is going on around here.
The SunShot Initiative and Solar Energy
The solar component of the initiative is dubbed “SunShot,” echoing the President’s call for a “Sputnik moment” to stimulate American innovation as the foundation for economic revival. According to DOE, the U.S. once had 43 percent of the global solar market, and now has only 6 percent. To get back up there, the installed cost of solar energy has to be on par with fossil fuels, which means it has to drop by about 75 percent. The Administration’s solution is to pump more public funds into transformative renewable energy research, and also to take a new approach: reducing permitting expenses, which are a significant factor in the overall cost of installed solar. One way to do this is by establishing national performance standards and codes, and also by digitizing and streamlining local processes.
President Obama and the U.S. Chamber of Commerce
That little item about reducing permitting costs sheds some new light on comments that the President has made about the need to reform government regulations. When he spoke before the Chamber of Commerce this week, he wasn’t trying to be conciliatory. He was laying it on the line: the job of the government is to regulate, get used to it. If regulations are sensible and appropriate, then they benefit economic growth, stimulate innovation, and provide needed protections for the general welfare. Apply that argument to renewable energy, and it’s pretty obvious that the President was laying out the ground rules for long term, robust growth in the private sector. By way of contrast, the virtually unregulated housing boom nutured by the last administration quickly disintegrated into a historic bust that continues to devastate millions of U.S. households.
A Renewable Energy Economy
The President’s Chamber speech made it clear that one of the functions of a government is to redistribute private funds for the general welfare. Aside from the huge chunk that goes to national defense and law enforcement, that means promoting the ability of U.S. citizens to do business: building roads and bridges, funding public research institutions, ensuring a skilled, educated workforce, and modernizing the communications infrastructure. In return, Obama basically told his audience to get off their butts and start hiring some workers and making some new investments with all that cash they’ve been squirreling away.
Preaching to the Renewable Energy Choir
Partly because the Chamber has staunchly opposed the Obama administration’s energy policies, it has lost a significant amount of support from the business community. Major players like Microsoft, Nike, Apple, and others either dropped their membership or clearly distanced themselves from the Chamber’s denialist position on climate change, and local chapters have backed away, too. Meanwhile, Obama has just named the head of clean energy-transitioning GE, Jeffrey Immelt, to head up his new economic advisory council. Obama’s Chamber speech gave part of the business community a veiled dressing-down, while sending a clear message of federal support for the growing renewable energy industry.
Image: Solar and wind power by Nick Branhall on flickr.com.
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