Congress Wants $900 Million in Clean Energy Cuts
The U.S. wind energy industry suffered through its worst year in recent history in 2010, with one of the prominent pure-play U.S. wind stocks, Broadwind Energy (BWEN) declining by 61% in the past one year.
China surpassed the United States at the end of 2010 as the largest wind power market in the world.
The nearly $2.4 billion for clean energy in the Obama budget also includes $220 million for biofuels and biomass R&D; $325 million for advanced vehicle technologies; and $231 million for energy efficient building technologies.
The Department of Energy "energy efficiency and renewable energy" budget is not the only way in which clean energy and energy efficiency programs are financed by the government. The Obama fiscal 2011 budget calls for a total of $4.7 billion for clean energy investments under the DoE.
Several recent programs for clean energy were financed through the Obama administration's economic recovery and stimulus act, too.
Additionally, the clean energy industry received a key federal subsidy at the end of 2010, when a one-year extension of the cash grant program for solar and wind projects was included in the massive tax cut bill. The Department of Energy also has a large loan guarantee program to fund research in energy, including renewable energy, and the Obama administration asked for an additional $36 billion in 2011. Of this, $500 million in the new budget request was related to a credit subsidy request to support $3 billion to $5 billion in loan guarantees for innovative energy efficiency and renewable energy projects. Appropriations is proposing to cut the DoE loan guaranty budget by $1.4 billion. "Look at the Appropriations committee cut list. They are not cutting stuff not because it's a 'bad' program. The point here is that debt and the deficit is a huge focus for 2011," said Benjamin Salisbury, analyst at FBR Capital Markets. President Obama's recent State of the Union address, its call for 80% of U.S. energy to be from clean energy sources by 2035, and the "Win the Future" rhetoric, stoked enthusiasm from clean energy stock investors. Stocks within the clean energy sector have been buzzing based on chatter out of Washington, even if in 2011 specifically, the federal government's role in supporting clean energy will be part of a battle with the deficit hawks over spending. On Tuesday, stocks in the lithium ion battery space were the latest to rally on hopes for more federal support. There were signals of more support from the White House for a point-of-purchase electric car tax credit. The current system allows buyers of electric cars to take a tax deduction, as opposed to receive a $7,500 credit for their electric car purchase at the dealership. Shares of A123 Systems (AONE) and Ener1 (HEV) spiked on the legislative chatter. Michigan Senator Debbie Stabenow is sponsoring the point-of-purchase legislation.
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