Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
The nearly $200 billion that global governments have dedicated to stimulus spending on greentech since 2008 is almost halfway spent, according to a report from Bloomberg New Energy Finance (PDF) released on Tuesday. Where should green technology companies focus their efforts in getting a piece of what’s left?
It depends. China leads the globe in green stimulus spending, the research firm reports. But those funds are being channeled through key state-run industries, meaning parties who want any of these funds will have to partner up with these gatekeepers.
In the U.S., on the other hand, stimulus spending has been spread out amongst many more companies and partners under a wider variety of forms, such as matching grants, tax credits and loans and loan guarantees. Key money-granting agencies like the Department of Energy have been struggling to avoid the pitfalls of spending it unwisely, which puts ever-more pressure on stimulus-seekers to prove the value of their technologies or business models.
All in all, world governments have given out $94.8 billion in green stimulus funds to date, with about $74.5 billion awarded in the last year, the report found. That leaves about $99.5 billion yet to be spent, though that’s spread unevenly around the globe. While the United States has spent only 36 percent of $65.1 billion in green stimulus, China has spent 69 percent of the $46.1 billion tallied by the report, and Japan has spent 80 percent of $10.4 billion, for example.
Indeed, figures vary on the point of just how much the U.S. has spent on green stimulus. According to a November report by the U.K.’s Guardian, the Obama Administration has released less than half the $90 billion it dedicated to stimulus for green projects including renewable energy, energy efficiency, advanced batteries and electric vehicles and public transportation.
But the Department of Energy has different figures for its share of stimulus funds dedicated to green projects. As of its latest weekly report on stimulus spending, dated March 4, the DOE says it had awarded $33.09 billion in stimulus funds, and of that amount, $12.38 billion had been outlaid, or sent out the door. (To learn more about DOE’s green stimulus efforts, come to our Green:Net 2011 conference in April.)
That’s a significant speeding up of DOE green stimulus spending from last year, when a series of reports found that several high-profile programs hadn’t given out much money at all. In August 2010, the DOE’s Office of the Inspector General found that only 8.4 percent of the $3.2 billion in state energy efficiency block grants had been disbursed, creating only 2,300 jobs, for example.
The DOE has been making great efforts to speed the green stimulus flow. As of September, DOE had obligated all but $1 billion of $32.7 billion in green stimulus grants and contracts, Matt Rogers, former DOE stimulus program chief, said recently at an energy industry event in Washington, D.C.
While the DOE had only spent $7.3 billion of that amount at that time, Rogers said it intended to spend about $1 billion a month over the next 18 months to catch up. As for the widely differing figures on just how much stimulus funding falls under the “green” category, that’s accounted for by differing definitions of “green” — does it include high-speed rail, for instance? — as well as which government agency is doing the awarding.
The DOE has struggled with doing due diligence on grant and loan-seeking projects in the face of an unprecedented flow of green stimulus cash. Even so, problems can arise. An October report from DOE’s inspector general found problems with poor performance and overpaying contractors doing low-income home weatherization projects in the Chicago area paid for by a $5 billion DOE grant program.
In December, the Center for Public Integrity reported that funds from the stimulus package for clean power and energy efficiency were issued with “sweeping exemptions” from basic environmental oversight. And in February, a federal judge allowed a lawsuit against the DOE’s clean energy grant program to continue, which could have wider ramifications on the practice of giving grants in lieu of tax credits for big solar power projects.
The DOE’s massive loan guarantee program for renewable power projects has also come under scrutiny. In November, a leaked White House memo revealed concerns in the Obama Administration about the slow pace of loan guarantees for renewable energy projects. At the same time, loan guarantees to struggling companies like thin-film solar startup Solyndra have led some lawmakers to question DOE’s decision to give it a $535 million loan guarantee.
For more research on cleantech financing check out GigaOM Pro (subscription required):
- Cleantech Financing Trends 2010 & Beyond
- Report: IT Opportunities in Electric Vehicle Management
- Car Data As the Next Platform for Innovation
Image courtesy of Steve Wampler via Creative Commons license.