Recovery Act Stimulates Green Energy

If the Obama stimulus program had been cast as an energy bill, the Center for American Progress maintains that it would have been the single-most important clean energy legislation in our history.

A recent report by CAP analysts said the American Recovery and Reinvestment Act (ARRA) drove unprecedented new investments in the public and private sectors.

One obvious case in point was the cash grants in lieu of production tax credits that saved renewable energy projects during the downturn. That program has supported more 1,800 projects with nearly $6 billion in direct aid.

The CAP said the ARRA clean energy provisions alone have already saved or created 63,000 jobs and are expected to create more than 700,000 jobs by 2012.

 “ARRA served over the last two years to sustain the fledgling American clean technology industry at a time when it was hard hit by economy-wide contractions in capital investment and struggling to remain globally competitive in the absence of a clear national energy policy,” said report co-author Bracken Hendricks.

“ARRA provided financing tools and signaled clear demand to investors. This helped U.S. businesses rebound, got new projects built, and put Americans back to work.”

Clean Tech Growing

Clean energy technology now remains one of the fastest-growing sectors of the global economy and it is projected to grow to $2.3 trillion by 2020, CAP said. The clean energy jobs component was also a successful argument in the defeat of the anti-global warming law ballot initiative in California last year.

A CAP comparison of ARRA investments in clean energy to what had originally been planned in the 2009 budget reveals that the Recovery Act more than tripled spending on innovative clean energy, efficiency, and modern energy infrastructure. For some technologies—such as smart grid investments—ARRA represented more than a 1,000 percent increase in clean energy innovation.

CAP cites these outcomes from the stimulus bill:

• ARRA’s clean energy provisions alone have already saved or created 63,000 jobs and are expected to create more than 700,000 jobs by 2012.
• More than 300,000 low-income homes have been upgraded with energy-saving weatherization, saving families on average more than $400 on their heating and cooling bills in the first year alone and $161 million in energy costs nationwide.
• ARRA provided $500 million in funds for green job training.
• Inner-city green jobs have grown by 11 percent—more than 10 times the rate of job growth overall.
• A guarantee for a $1.3 billion loan has been finalized to support the world's largest wind farm.
• Other measures such as the Treasury grant program (section 1603) proved essential to companies in financing new renewable energy projects, driving the industry’s rebound during the Recovery Act period.
• The Recovery Act’s investments of $80 billion for clean energy will produce as much as $150 billion in clean energy projects due to leveraging private investment.

Now, the challenge for clean energy is to have the private sector pick up the slack as government spending winds down. In the new budget climate in Washington, the prospects for a second stimulus on the scale of 2009’s no longer exist.