Established under the stimulus bill to extend a much-needed lifeline to the newly emerging renewable energy industries, Section 1603 grants, previously scheduled to expire at the end of December, were extended at the last minute for one more year under the tax compromise passed by Congress during the lame duck session.
The grants were thrown in to sweeten a failing deal after House Democrats rejected the tax package offered to them during a preliminary caucus vote. Frustrated that they didn’t have more of a say in the package, Democrats believed that President Obama caved too easily to Republican demands.
The grants, worth about $1 billion, offer 30 percent of the upfront investment costs to companies building and operating wind, solar, or other clean energy projects. Ethanol tax credits, research and development credits, and a raft of smaller credits supporting energy efficient homes and appliances were also extended.
Solar Energy Industries Association (SEIA) reports that the program helped move forward more than 1,100 solar projects in 42 states, supported $18 billion in new investment, and played a critical role in allowing the solar industry to grow by over 100 percent in 2010, the result: enough new solar capacity to power 200,000 homes and provide work to more than 93,000 Americans.
“This is a great day for America’s solar industry. With an extension of the 1603 program now in place, the solar industry can continue its record growth, creating new career opportunities for Americans in all 50 states in 2011," said SEIA President and CEO Rhone Resch in a statement released after Congress passed the legislation.
“Common sense programs like 1603 support renewable power projects like wind farms that produce jobs right now, and getting wind turbines in the ground helps attract wind manufacturing jobs … and support long-term growth," said Sen. Max Baucus (D-Mont.), author of the 1603 grant provisions, in a statement published on his website.
Obama’s Green Jobs Strategy
President Obama ran on a platform of enhancing U.S. global leadership and competitiveness in green energy technologies, and has followed up with an administration and policies to support it. Programs such as the Section 1603 grants are just one aspect of this movement, in addition to government funding for R&D, science-based policymaking, and programs to support math, science, and engineering education.
The American Recovery & Reinvestment Act included more than $80 billion for renewable energy, including for expanding the capacity for clean energy, advancing vehicle and fuel technologies, expanding smart grids, supporting home retrofits, and funding R&D.
Over the last 10 years, positive trends in clean energy industries, particularly in solar and wind, have occurred with minimal government investment. Many believe that as federal interest in these industries increases, their growth will expand exponentially. There is also the hope that the nation’s decline in manufacturing jobs, mainly to outsourcing overseas, can see some recovery through these emerging industries.
According to Pew Charitable Trusts, the number of jobs in America’s clean energy economy grew nearly two and a half times faster than overall jobs between 1998 and 2007. By 2007 the number of clean energy jobs reached 770,000, compared with 1.27 million in the fossil fuel sector.
“The clean energy economy is poised for explosive growth,” said Lori Grange, interim deputy director of the Pew Center on the States, in a statement this year.
Both Obama and Energy Secretary Dr. Stephen Chu, have made public speeches calling for a new “sputnik moment”—a decisive national strategy and investment on the scale of the 1950s and ’60s space race to spur innovation in clean energy technologies.
“Federal support of scientific R&D is critical to our economic competitiveness,” said Secretary Chu recently during a luncheon at the National Press Club.
The government has created a new organization, modeled after the defense agency responsible for producing the Internet, stealth aircraft, and other technological breakthroughs. The Advanced Research Projects Agency-Energy (ARPA-E) is administered by the Department of Energy.
Through ARPA-E, a total of 117 science research projects have been granted $349 million in federal funding. Researchers are hoping to discover improvements in battery technologies, power conversion efficiencies, air conditioning efficiency upgrades, and enhanced flexibility for power grids to allow them to accept renewable power inputs, among other technological advances.
Other federal grants worth $777 million in funding over five years, have established 46 new research centers, involving 1,800 researchers and students from universities, national labs, private companies and nonprofits.
To prepare the innovators of the future, scholarship opportunities for higher education are being paired with marketing campaigns aimed at inspiring students to pursue careers in science and engineering.
Recently, a science-based advisory group created by the president, the President’s Council of Advisers on Science and Technology (PCAST) suggested the creation of a Quadrennial Energy Review (QER), modeled on a similar format used by the Department of Defense, to coordinate among agencies, and create a national energy strategy tasked with transforming the nation’s energy system within one to two decades.
They also recommended an increase of $10 billion per year, over the current approximately $5 billion, to support energy-related research. The money, they suggest, could come from energy production delivery in the short-term, and perhaps carbon dioxide emissions pricing in the long-term.
“The development of clean, secure, safe, and affordable sources of energy is clearly one of the pre-eminent challenges facing the United States and will be central to solving a host of other challenges in the years ahead,” said Ernest Moniz, cochairman of the PCAST Energy Technology Innovation System Working Group in a press release.
After suffering midterm election losses, both the president and Republican leaders expressed a willingness to work together on energy, specifically on new fuel efficiency standards for cars and trucks. Expansion of traditional energy extraction methods in the U.S., such as offshore drilling and the use of controversial hydro-fracking technology to extract natural gas from shale will most definitely be on the table, as will nuclear energy plant expansions.
Future funding for sweeping energy policy arrangements, continued R&D, and programs like the Section 1603 grants, will be sure to inspire lively debates in the 112th Congress, beginning January.
