Policy & Politics

Published on April 25th, 2011 | by Susan Kraemer


Despite GOP Budget, DOE Can Fund More(!) Renewable Energy

April 25th, 2011 by  

The Department of Energy’s renewable energy loan guarantee program has actually gotten more funding in the wake of the GOP clean-energy-smothering budget, reports Kirsten Korosec at BNET. Not that the new GOP congress is actually secret best friends with clean energy, but rather, simply from a little detail that may possibly have slipped by unnoticed. Here’s how it happened.

The “authorization” bucket is how much you can spend.
The “appropriations” bucket is the money you actually have to spend.

Although the budget trimmed the authorization funding, it actually expanded the appropriations funding with credit subsidies. So there are now more funds for clean energy.

Then there are two loan guarantee programs for clean energy: one that Republicans like because it includes CCS and nuclear, and one they tried to cut, because it was passed in the Recovery Act.

The 1703 program provides funding for any not yet commercialized (or fewer than three projects) technology that offers “new or significantly improved” technologies to reduce greenhouse gases – in nuclear, advanced fossil energy coal, and carbon sequestration – but also in biomass, hydrogen, solar, wind, hydropower, electricity delivery and energy reliability, alternative fuel vehicles, industrial energy efficiency projects, and pollution control equipment.

The 1705 program was a Recovery Act program which funds 30% cash upfront for renewable energy projects built by companies that did not make a profit to take a 30% tax credit against. This was to have expired last year, but was miraculously extended in the tax cut deal for millionaires, getting a stay of execution until September 2011. But now it allows applicants that have conditional commitments, but haven’t closed by September to cross over to the no-expiration 1703 program.

Since so many of the new solar projects being permitted involve new technologies, many utility-scale solar projects are eligible. The DOE 1705 program has provided funding for projects whose innovative technologies have difficulty securing financing from traditional lending sources hard hit by the financial crisis and therefore less willing to take on the risk of pouring money into unproven technologies.

Since the new Obama administration hiring of Jonathan Silver, a VC funding pro, to administer the program, the DOE loan guarantee program has funded 27 innovative projects with $30 billion in loans and loan guarantees, and that in turn has elicited 45 billion in additional VC funding for these projects.

Silver, who is former managing general partner at D.C-based venture capital firm Core Capital Partners lit a fire under the loan guarantee program’s decision-making process with the hiring of 180 employees. Under the previous administration, it had only 14 employees and not even a computer-based application process.

What does this mean for clean energy investment? “We actually have new funds in the 1703 program to provide credit subsidies for applicants”, says Silver, “which we’ve never had before.”

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About the Author

writes at CleanTechnica, CSP-Today and Renewable Energy World.  She has also been published at Wind Energy Update, Solar Plaza, Earthtechling PV-Insider , and GreenProphet, Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times.    Follow Susan on Twitter @dotcommodity.

  • Simon Covington

    The Solyndra case proves that the DOE LOAN and ATVM funding was based on pure bribery and lobby manipulation. All of the failure points on Solyndra have been visible for ages. Feinstein and DOE pushed the money to Solyndra in exchange for pass by fees to their friends and campaigns.

    Kleiner Perkins put Chu in office as Secratary in order to get favored nations funding for their portfolio companies and keep competitors to those portfolio companies from getting funded. Steve Westly and Kholsa helped them along with Raj Gupta.

    Detroit’s lobbyists said,” we can’t get you any more taxpayer money because the public knows we are liars” “Tell them we need the money to build electric cars- and then we can BS them into coughing it up” said the lobbyists. The law said that the money was to go to any American car company but it only went to a Japanese company and Detroit. (Tesla is now controlled by Detroit no matter what crap Elon foists off so don’t say they are not part of it.) All of the independent electric car companies who weren’t part of Detroit or the Gore VC’s were blockaded from funding. The way they did it is against the law.

    The DOE ATVM And Loan Gaurantee programs were conducted by criminals in order to commit crimes. Steve Rattner, who was at the head of those programs, has already been charged with crimes. Lachlan Seward, Matt Rogers and the rest of them need to go to jail.

    Steve Rattner (Now a proven criminal by the State of NY), Lachland Seward, Matt Rogers and his partner Steve Spinner and most of Tesla’s friends at McKinsey Consulting from Silicon Valley (Who used Tax payer jets to fly back and forth to Silicon Valley to go bike riding), Steve Westley and a group who now left DOE, and some who are still there are criminals. They stole your tax money and put in their friends pockets. Federal investigations have already shown that Detroit embezzeled and misspent the first monies distributed.

    The few applicants that did get money spent tens of millions of dollars on bribes and lobby “incentives” equal in ratio to the money they got. Now the White House says that $17B of the taxpayer money that DEtroit got is a write-off and is lost forever. In other words Detroit has already embezzeled more money than all of the other applicants applied for put together.

    Google Tesla’s Siry on “DOE stifles innovation” to read what one of the highest level staff at one of the car companies said.

    The GAO, a federal crime busting agency, just released public reports saying that the DOE Loan programs were corrupt. All of the people under Seward were “connected” or “made men” in the Detroit cadre. Seward changed the section 136 first-come-first serve rule (Which appears to be illegal) in order to provide advantages to his friends in Detroit who didnt bother to apply in time and to cut out the smaller players who were already ahead in the application proces

    Subpeonas of Detroit and DOE Loan Departments will prove crime, corruption, favoritism and rigged contracts were the rule and not the exception.

  • Stephen Tsang

    hi Susan, I am a little bit confuse with the 1705 program. The 30% federal grant is based on 1603 Program: Payments for Specified Energy Property in Lieu of Tax Credits, isn’t it? Based on the 1603 program guidance, the qualified property must be originally placed in service between 1/1/2009, and 12/31/2011 with a 5% safe harbor. Can you provide me some light?

    • Condu200

      Stephen, you are mostly correct. Projects can also qualify for Sec. 1603 if they can certify they began construction between 1/1/2009 and 12/31/2011 and brought it into operation before the credit termination date (e.g. end’2016 for solar, varies by technology). The author of this article has conflated Sec. 1603 and 1705.

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