Stimulus funds for clean energy largely unspent

“Some folks on one end of the spectrum say the stimulus hasn’t done a darn thing,” says Rob Sargent, who tracks clean-energy for EnvironmentAmerica, a Washington-based advocacy group. “If you look around and see – it has led to investments in clean energy of a magnitude we’ve never seen.” Other expert watchers agree.

“Broadly speaking, the stimulus has helped an enormous amount,” says Alex Klein, research director for Emerging Energy Research, a market research company based in Cambridge, Mass. “Treasury grants have helped expedite wind development, manufacturing incentives have jump-started battery manufacturing – and kept wind and solar manufacturing in the US alive.”

The stimulus has expedited both project development and helped to build local supply chains, Mr. Klein says. But some note that the stimulus, while keeping the wind-power and other renewable industries from tanking in 2009, has not worked a miracle on US clean-energy manufacturers’ competitiveness.

“We’re not competitive yet with other clean-energy export nations,” says Kevin Book, managing partner with ClearView Partners, a Washington energy research and consulting firm. “There’s an argument to be made that we could become the next big manufacturer of clean tech, but we’re not the most compelling candidate right now. China and Germany are ahead of us."

News reports highlighting Texas wind-farm projects that purchased Japanese-made turbines – and others with plans to purchase turbines from China – have had congressmen throwing up their hands in protest.

So is Bob Lloyd, plant manager at Clipper Wind Power’s Waterloo, Iowa, manufacturing plant. His plant had layoffs a year ago and is still operating at less than half its capacity.

“We’re trying to build this product,” he says. “ 'Hey, we're paying taxes, and we don’t want to pay taxes to bring in foreign-made products' – that’s the feeling of folks around here.”

Clipper and General Electric are America’s only domestic wind-turbine manufacturers. But while Clipper’s business is picking up, their plight highlights a conundrum: Until US demand for clean energy grows, it will be hard to develop domestic clean-energy manufacturing that can out-compete overseas companies on price as well as quality, experts say.

The stimulus support can't produce an overnight transformation for US clean-energy manufacturers, Mr. Book says. What’s needed is a “natural demand” for clean-energy, or a “legislative demand.” And yet, a cap-and-trade climate bill that would do just that, by putting a price on carbon emissions from coal-fired power plants, is stalled in Congress.

“Unless natural demand for clean energy develops in the US – or it can become a competitive exporter to markets overseas, the spending won’t have succeeded,” he says. “We have to have a price on carbon.”

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