By CAP’s Richard W. Caperton.
Yesterday, 34 clean energy companies and seven associations that represent different sectors of the clean energy economy sent letters to Congress urging them to not end the Department of Energy’s Loan Guarantee Program. The companies identified 34 projects in fifteen states that would be at severe risk of not moving forward if this program is eliminated. These projects will immediately create 35,000 direct jobs.
Distressingly, the House of Representatives doesn’t think these jobs are worth saving.
In the budget plan that passed the House earlier this year, HR 1, they propose eliminating all funding for new clean energy loan guarantees. As I’ve written before, this will not only kill jobs and hold America back in the race to a clean energy future, it also represents a reckless willingness to arbitrarily change the rules during the game, which will ultimate cost investors millions of dollars in each of these projects.
The loan guarantee program is a powerful tool to drive investment in new technologies that struggle to attract the financing necessary to grow at scale. According to the letter from the clean energy companies,
Our companies represent a wide range of renewable energy technologies that produce electricity and liquid fuels — solar, wind, geothermal, biomass, biofuels — as well as critical technology to transmit electricity from wind and solar production. The DOE loan guarantee program represents the best and often only way to cross the barrier from developing clean domestic energy technologies to deploying those technologies commercially here in the U.S. and around the world.
These companies then describe what will happen if the loan guarantee program is defunded as part of a budget agreement,
Unless the full year CR protects funding for the program, our economy could sacrifice a generation of our best clean technology opportunities — delivering a devastating blow to the US renewable energy industry. Longer-term, future projects that will seek private sector lending once they are proven commercially with the help of the Loan Guarantee Program would be jeopardized, damaging U.S. competitiveness and domestic manufacturing and a supply chain that is dependent on the large-scale deployment of renewable projects in the U.S.
In a separate letter, trade associations representing biofuels, wind, solar, biomass, and geothermal companies, as well as clean energy investors and entrepreneurs, put the House’s proposed cuts into context, describing the energy challenges we face,
Deployment of next-generation manufacturing and energy production technologies will help address the immediate and pressing need to reduce our nation’s dependence on imported oil and ensure our global edge in developing clean energy technologies. The U.S. is spending $560 billion annually to import foreign sources of oil, which now constitute 60 percent of our total oil demand. This addiction to foreign oil takes a tremendous toll on our economy; the high oil prices of 2008 alone transferred nearly $1 trillion to members of OPEC. With crude oil prices again near $100 a barrel and political unrest continuing in oil producing regions of the world, now is not the time to eliminate funding for programs designed to increase our energy security and create jobs here at home.
The associations go on to describe why the loan guarantee program, in particular, should be maintained,
As Congress moves forward with efforts to cut federal spending, it is important to recognize and retain programs that create American jobs, leverage private sector investment and increase tax revenue. The DOE Loan Guarantee Program is one of these programs. Eliminating funding for this program will disrupt and delay dozens of projects that are seeking a DOE loan guarantee, and will have very real impacts on job creation and energy security efforts currently underway.
HR 1 includes dozens of dangerous and ill-timed cuts to energy programs. As the House and Senate negotiate about ways to pass a budget and avoid a government shutdown, they should save the DOE Loan Guarantee Program by removing it from this list of cuts.
To read the complete letter from 34 clean energy companies and see a list of projects they represent, click here.
To read the complete letter from 7 associations representing clean energy businesses, click here.
— By Richard W. Caperton of CAP’s Energy Opportunity team.