(Congress, clean energy budget cut story updated for results of Gallup poll)

NEW YORK (

TheStreet

) -- The House Appropriations Committee wants to cut clean energy funding by $900 million, a sizable piece of President Obama's proposed spending on clean energy in the 2011 fiscal budget. As compared to the existing 2010 federal budget, which has roughly $200 million less in the line item for clean energy, the proposed cuts would be equal to $786 million.

When compared to either the fiscal 2010 budget or fiscal 2011 budget, the steep cuts being requested by Congress highlight the debate over clean energy spending by the federal government at a time of increased focus on the federal deficit. The big hit to clean energy funding was included in the House Appropriations Committee full release on Wednesday of its proposed budget cuts for fiscal 2011. There was also a clear focus on cutting money for renewable energy among the large list of programs being targeted by Congress.

President Obama's fiscal 2011 budget line item for "energy efficiency and renewable energy" is a request of $2.36 billion -- the 2010 budget number is $2.2 billion. The $900 million reduction in clean energy spending would represent 37.5% of the 2011 request budget request.

The Appropriations Committee didn't specify where cuts were being proposed within the general clean energy and energy efficiency budget.

The Obama Administration proposal of $2.36 billion in energy efficiency and renewable energy spending -- which would be administered by the Department of Energy -- was 1.6% larger than President Bush's last budget request for energy efficiency and renewable energy, according to a Senate analysis of the budget.

In the Obama fiscal budget 2011, spending on solar would be increased by $55.4 million to $302.4 million, according to the Senate analysis, which would be 5.5% less than President Bush's last request for solar energy.

A

SunPower

( SPWRA) executive was recently among the solar industry officials present for Department of Energy Secretary Steven Chu's "sun shot" announcement, when the DoE announced the goal of making solar power as affordable as traditional power within a decade.

The amount that DoE was talking about devoting to the "sun shot," $27 million, was relatively small compared to the budget figures now being debated by the White House and Congress.

U.S. solar company

First Solar

(FSLR) - Get Report

is the low-cost leader in the solar industry, but there is a race on between First Solar, other U.S. companies including SunPower, European solar companies, and the low-cost Chinese solar companies for control of the solar marketplace.

In the Obama fiscal budget 2011, spending on wind energy would be increased by $42.5 million to $122.5 million. That request is 39% larger than President Bush's last budget request for wind energy.

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) - Get Report

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.

>>China Wind Causes Stir

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.

>>3 Obama Green Energy Programs Mired in the Red

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.

The natural gas vehicle companies, including

Westport Innovations

(WPRT) - Get Report

and

Clean Energy Fuels

(CLNE) - Get Report

have also come into 2011 hoping that this will be the year that the Natural Gas Act is finally passed into law after its failure to find a legislative vehicle in 2010.

>>Westport: 3 Ideas Beyond the Earnings Miss

In his analysis of the Congressional budget cut request, FBR Capital analyst Salisbury noted that the proposal would cut nearly $2 billion from the EPA and $3 billion from the Department of Energy.

"Although we expect the President to continue lobbying for expanding clean-energy research and manufacturing, we believe that downward spending pressure makes very large new programs, such as electric car grants and natural gas vehicles, unlikely," the FBR analyst wrote on Thursday morning.

However, the analyst added in a note of potential political opportunity, "summer gas prices and a more Republican majority more favorable to natural gas could change this dynamic."

Yet the debate between Democrats supporting President Obama's "Win the Future" plan and the deficit hawks in the opposition leaves out one important voice in the debate: the American people.

In fact, a recent

Gallup

poll of Americans indicated that there is widespread support for alternative energy legislation, above all other legislative priorities.

Passing an "energy bill that provides incentives for using solar and other alternative energy sources" had the most bi-partisan support among Americans polled by

Gallup

in mid-January. Roughly 83% of Americans support the idea, an even higher percentage of Americans than support overhauling the U.S. tax code and speeding up the withdrawal of troops from Afghanistan, which had the second- and third-highest levels of public support.

Only 15% of those included in the

Gallup

poll were opposed to an alternative energy focused energy bill.

Notably, the alternative energy concept had more widespread support than legislation to support traditional oil and gas drilling. The

Gallup

poll found that 65% of Americans support a bill to expand drilling and exploration for oil and gas, while 33% oppose it.

Gallup

concluded from its poll results that "With Republicans in control of the House of Representatives and Democrats in control of the Senate, it would appear the proposals with the best chances of passing are those that generate strong bipartisan support. That is clearly the case for a bill that would provide incentives for increased use of alternative energy."

-- Written by Eric Rosenbaum from New York.

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