Scholars at the Brookings Institution and the Oakland’s Breakthrough Institute are to release a report on Wednesday that warns that there is a sharp decline in finances set for federal spending on clean technologies. The study warns that more clean-tech companies are possibly on the road to bankruptcy or consolidation now that there seems to be little additional help that the Congress is offering.
According to the study, “Beyond Boom & Bust: Putting Clean Tech on a Path to Subsidy Independence,” federal spending specific to renewable energy sources reached an all-time high in 2009 at $44 billion. This was a one-time stimulus funding dubbed The American Recovery and Re-investment Act, which further pumped additional millions towards clean technologies.
In 2011, federal spending fell to $30.7 billion as the stimulus funding wound down. This year (2012) the figures will drop to $16.1 billion and by 2014 the value is expected to be just $11 billion – which amounts to a 75% drop in 5 years.
In an interview prior to the report release, Mark Muro, one of the Brookings Institution’s senior fellows said, “We’re falling off the cliff,” which shows just how the situation really is.
The wind industry, for instance, is lobbying Congress to at least extend the credit made available to the federal wind energy Production Tax Credit for another 4 years. This fund, providing wind farm incentives, is set to expire at the end of the year 2012. Many companies are making a rush to finish up stalling projects due to the uncertainties facing them in the future.
Globally, clean-tech companies are making stringent measures to adjust to the falling trends. For instance, just last week, BrightSource Energy, an Oakland-based developer of solar power plants, had to cancel its planned IPO due to investors’ tepid interest; earlier this week, San Jose-based SunPower, Silicon Valley’s dominant solar manufacturer announced a possible closure of its Philippines factory in a bid to cut costs. FirstSolar (based in Arizona) said on Tuesday that it would close its factory in Germany, reduce production in Malaysia, and cut its global workforce by a third.
Now this is sad news, but we shouldn’t despair. Oil has no way to go, and the energy of the future will come from a lot of sources but that.