The green stimulus package decoded
- The Department of Energy’s appropriation jumps dramatically upward, from a typical $2 billion annual budget for EERE (Energy Efficiency and Renewable Energy) to $14.4 billion. With this increased funding comes a dramatic shift in DOE operations. Normally, that $2 billion is used mostly to cover R&D. No money goes out for implementation except for a few grants. Now the DOE will distribute the money to grant applicants directly, adding their decades of expertise to on-the-ground implementation.
- Finally the restrictive $2000 cap was removed from an existing law that provides a 30 percent tax rebate for building owners installing solar systems. The cap made the bill almost irrelevant, and lifting it is expected to dramatically spur adoption of solar. It also is broadened to include other systems like geothermal.
- $7 billion will go directly to upgrading and retrofitting federal buildings to higher levels of water and energy efficiency. This is geared towards rapidly creating green jobs.
- $6.5 billion will go into revamping the nation’s energy grid. Right now the U.S. is a 21st century civilization powered by an early 20th century electrical grid (metaphorically it’s a bit like having our freeway system paved in dirt). This appropriation will upgrade the grid to allow the expansion of intermittent power sources like solar and wind, though there are some skeptics.
- $22 billion in tax breaks spread over 10 years (not counting accelerated depreciations) will give companies an incentive to implement EERE.
- $60 billion in load guarantees will be run out of DOE backing the expansion of new energy companies. The federal government becomes 10 percent backer of the loan, providing a reduced interest rate, much like a T-bill. Some of this will go to emergent technologies like nuclear and cellulosic biomass and, yes, “clean coal.”
- $4.2 billion for block grants for EERE inside the DOE’s $14.4 billion. Half of this money, $2.1 billion, will go right to the states for community development awarded based on population and will include local and tribal government projects (casinos excluded!). The other half will be competitively awarded, with priority given to projects that incorporate energy efficiency and include broad coalitions, such as groups of cities.
- Ways & Means repaired another tax problem that prohibited taking the renewable energy tax credit if other sources of funding, like county financing, were received. Congressman Mike Thompson succeeded in spearheading he reversal of this IRS ruling.
- The Clean Counties Grant Program. Here NOCa was highly effective working with decision makers on the Hill to incorporate a special program inside the upcoming Energy Bill (not part of the Recovery Bill). The grant program is a huge victory in breaking down the barriers between technologies. Normally, if an applicant wanted to do both solar and water conservation, they would have to apply twice to two different entities. Now the grant will no longer be segmented by technology, but rather be fundable as an integrated whole.
- $3.2 billion for qualified environmental conservation bonds awarded at the county level based on population.
- Senator Waxman is hard at work on a Clean Air Bill that is expected to come up for a vote in the Spring. Details are not yet available, but it is widely expected that a cap & trade system will be put in place, allowing renewable energy producers to raise additional funds by selling carbon credits to manufacturers who will now be subject to a cap on their greenhouse gas emissions.
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