As U.S. Aid to Clean Energy Dwindles, Pondering What Could Come

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The New York Times
Wednesday, October 24, 2012

As U.S. Aid to Clean Energy Dwindles, Pondering What Could Come

By JOHN BRODER

WASHINGTON — PRESIDENT OBAMA’S 2009 stimulus package included the largest single piece of energy legislation in American history, a $90 billion money pile for energy projects from the mundane to the exotic.

In less than three years, it financed construction of solar and wind farms, doubling renewable electricity generation. It paid for the installation of 13 million “smart” electrical meters, a start to modernizing the country’s electrical grid. It paid to weatherize a million homes, saving low-income families an average of $400 a year on their utility bills. It provided a spark for the domestic electric vehicle industry, financing construction of more than two dozen advanced battery factories. And it provided the seed money for what may emerge as a new industry in America: the production of liquid fuel from bacteria and other microorganisms.

The spending package provided billions for high-speed rail and mass transit, for job training and for carbon capture demonstration projects. But the stimulus money is almost all gone, leaving many of these projects without a government benefactor and making them orphans in a competitive marketplace dominated by the deep-pocketed fossil fuel industries.

What happens now?

The Obama administration’s clean energy venture has been contentious from the start, generating enormous debate over the role of government generally and over the financing of energy technology and innovation specifically.

Republicans have made an issue of Solyndra, the California solar panel maker that declared bankruptcy after receiving a stimulus-backed $528 million loan guarantee. Similar opprobrium has greeted the bankruptcy filing last week of A123 Systems, a maker of batteries for electric cars that got $132 million of a $249 million stimulus grant. Mitt Romney, the Republican nominee, and his running mate, Representative Paul D. Ryan, have used such failures as case studies in what they call government overreach, crony capitalism and the distortion of free markets.

“I had a friend who said you don’t just pick the winners and losers,” Mr. Romney said in his first debate with President Obama. “You pick the losers.”

The administration’s defense has been that successes have far outnumbered failures in the clean energy loan program and that even failures can provide knowledge that will pay off down the road. Energy Secretary Steven Chu, a Nobel Prize winner in physics, has said: “We’re swinging for the fences. We’re going to strike out a lot, but we’ll hit a few grand slams.”

Mr. Romney has made clear his distaste for government subsidies for alternative energy and for government acting as a venture capitalist for individual clean energy companies. He has said he would eliminate the production tax credit for wind turbine makers, for example, and would apply much stricter standards to the Energy Department’s loan guarantee program, if not do away with it entirely, even though it was created under the George W. Bush administration with bipartisan support.

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