SUNDAY, OCTOBER 24, 2010
KLMNO
EZ SU POLITICS & THE NATION
Clean energy industry looks ahead STIMULUS
ASSESSMENT Firms see challenges
to progress, job creation BY JULIET EILPERIN
AND STEVEN MUFSON The billions in federal stimu-
lus dollars spent on expanding “green energy” industries and creating “green jobs” have pro- vided a lifeline for U.S. wind and solar companies, but renewable- energy executives are worried that the future will not be as promising. President Obama frequently
points to these wave-of-the-fu- ture jobs as one of the substantial achievements of his administra- tion, and wind and solar execu- tives say that the economic stim- ulus bill turned 2009 into a banner year instead of a cata- strophic one for their businesses. But limited funding in one
area, a slow ramp-up in another, prolonged negotiations over loan guarantees and the continuing economic slump have made it difficult for the industry tomake the kind of progress Obama and many others had hoped for and imagined. As a result, the presi- dent does not appear to have gotten much political credit for newgreen jobs, despite hismany visits to battery, solar and wind facilities aided by the stimulus package. Adding to the uncertainty, in-
dustry officials say their busi- nesses could contract sharply unless a key tax subsidy, set to expire at the end of the year, is extended. “In the short term, did this
recovery programmake newjobs in the clean energy sector? I think the answer is yes,” said Joshua Freed, director of the clean energy program at the think tank Third Way. “What does that mean when we look back in two or three years? It takes awhile to figure out the conclusion of this story.” The White House, however,
has already declared the pro- graman unqualified success. The Council of Economic Advisers issued a report in July that found the American Recovery and Re- investment Act’s more than $90 billion in total spending and future tax breaks produced 190,000 “clean energy” jobs in the first quarter of 2010. A recent Lawrence Berkeley National Laboratory study found that the act’s $5.4 billion in investment tax credits have created or saved 50,000 jobs in the renewable sector. Critics say that the samemon-
ey could have been used to create more jobs or to produce them
faster, but Obama administra- tion officials say the clean energy positions are not the same as other jobs, such as road work. “The recovery act was a diver-
sified portfolio of actions. Some items were designed to be faster but didn’t have asmuch bang for the buck,” said Jason Furman, deputy director of the National Economic Council. “These are the types of jobs where they tend to be higher paying. They tend to be longer lasting.”
Success rates The effectiveness of the stimu-
lus money for energy has varied widely fromone basket ofmoney to another. One highly touted program in
the Energy Department’s portfo- lio — a loan guarantee program for renewable energy projects — has shrunk from $6 billion to $2.4 billion. The White House directed 60 percent of the fund- ing to unrelated areas, such as an education measure and the “Cash for Clunkers” incentive for people to replace old vehicles. The Energy Department also
needed time to gear up; the $32.7 billion itwas chargedwith hand- ing out is substantially more than its previous annual bud- gets. With spending deadlines approaching, the department has picked up its pace of grant- and loan-making, shoveling $8.2 billion out the door in Septem- ber, according to department officials, much of it to state and local governments for energy efficiency programs. Before the recovery act, the
Energy Department did not have a loan guarantee office. It has hired 200 employees and con- tractors. But Rhone A. Resch, president of the Solar Energy Industries Association, said that many companies have waited 19 months for decisions. By contrast, a program that
provides wind and solar projects with cash instead of tax credits has been a huge success. Before the economic slump in late 2008, financial institutions provided most of the capital for those projects and used the tax credits worth 30 percent of costs. Now wind farmdevelopers, who often don’t have the earnings to offset the tax credits, have been turning to the Treasury for grants of equal value as allowed under the recovery act.
Large and small firms have
benefited. The program steered $975 million to Iberdrola Re- newables, based in Spain, for 13 wind projects operating in nine states. It also funneled $15,964 to the Grumpy Troll Brewery, Res- taurant and Pizzeria in Mount Horeb, Wis., so the brewpub could install 38 solar panels on its roof. Don Furman, Iberdrola’s se-
nior vice president, said the deci- sion to offer companies the op- tion of a cash payment rather than a tax credit kept it from shutting down several opera- tions in the United States. “This literally saved the indus-
try,” Furman said, adding that wind producers could no longer sell their tax credits on Wall Street as they had in the past. NextEra Energy, the nation’s
largest wind developer, used the grant program, or convertible investment tax credit, for 93 percent of the 985 megawatts of wind power it built in 2009. “It’s difficult to put an exact
number on how many more megawatts we built as a result,” said company spokesman Ran- dolph Clerihue, “but we definite- ly put more steel in the ground than we would have without it.” The program helped wind
projects continue apace in 2009 and has led to a significant increase in solar installations over the next two years. But the U.S. wind industry is contracting this year and is expected to be slow in 2011, Furman said, “part- ly because nobody knows what’s going to happen when this pro- gramexpires.” Without legislation mandat-
ing a national renewable energy standard for utilities or limits on greenhouse gases, experts say, it remains unclear whether wind and solar energy will make meaningful inroads into the na- tion’s energymarket. Nonetheless, as Obama has
campaigned in recent weeks, he has touted these programs as one of the main ways he is helping Americans get back to work. When asked in DesMoines what his policies will do in the next year to help an unemployed church congregant “secure a job and have that American dream again,” the president cited awind turbine maker in Fort Madison, Iowa, that had received stimulus funds. Noting that the business
DIGEST NEWSMEDIA
Tribune Co. files plan for recovery Tribune Co. filed a reorganiza-
tion plan late Friday that would turn over control of the bankrupt newspaperpublishertoitsleading creditors, including J.P. Morgan Chase;Angelo,Gordon&Co.; and OaktreeCapitalManagement. The plan signals an important
step toward the recovery of the mediacompany—whichowns the Los Angeles Times and the Chica- go Tribune—fromwhat SamZell, the real estate developer and ar- chitect of the 2007 leveraged buy- out, called“thedeal fromhell.” Zell took the 163-year-old pub-
lisher and owner of 23 television stationsprivate ina2007deal that loaded the company with more than $8 billion in debt. It filed for bankruptcy a year later, buckling under the weight of the debt load andaseveredeclineinadvertising revenue.
—Reuters CALIFORNIA
Witness describes fatal shark attack The friend of a teenager who
was killed by a shark off the cen- tral California coast Friday said thevictimcriedout forhelpbefore hewaspulledunder. MatthewGarcia,20, saidhewas
two feet from Lucas Ransom, 19, when the shark rose out of the water without warning and bit into Ransom’s leg. Garcia said his friend cried “Help me, dude!” be- forehedisappeared. “It was really fast,” Garcia said.
“You just saw a red wave and this water is blue—as blue as it could ever be — and it was just red, the wholewave.” Garcia, who estimated the
shark was about 18 feet long, was poundedbywavesashe lookedfor Ransom. He finally spotted the body
board that was attached to Ran- som by a cord, and swam to him. Garcia said he did CPR as he pulled him from the water but Ransom was limp. Authorities saidRansombledtodeath. —AssociatedPress
NEWYORK
20,000 trees planted in citywide effort Volunteers and city workers
plantednearly 20,000trees Satur- day in New York’s public parks as part of an ongoing campaign to beautify the city andcleanits air. The planting blitz took place at
parks throughout Staten Island, Brooklyn,Queens andtheBronx. Mayor Michael R. Bloomberg
has setagoalof 1millionnewtrees for the city by 2017. Nearly
DAVID ZENTZ/ASSOCIATED PRESS
Jet Savoy, front, and Jose Soto field bids during a home foreclosure auction in Los Angeles on Saturday. More than 100 homes were available at the auction, the first of three this week in Southern California.
400,000have beenplantedso far. —AssociatedPress
Ohio judge overrides parents, lets teen wed: An Ohio judge al- lowed a pregnant 17-year-old to get married without her parents’ consent after the bride-to-be said she could be forced to have an abortion if she stayed at home. The Columbus Dispatch reported that the couple, who each turn 18 inafewmonths,gotmarriedTues- day after a hearing. The bride’s mother expressedoutrage. —AssociatedPress
had converted a shuttered facto- ry, Obama said it had “just hired several hundred people andwere looking at hiring several hun- dred more because they are see- ing some certainty in the renew- able energy industry.” Last week, he told a Seattle
resident during one of his back- yard chats that because of the recovery act’s investment in ad- vanced car battery technology, the U.S. global share of this high-tech market should rise from 2 percent to 40 percent by 2015. “That shows you how fast we
can turn things around if we’re making good, smart, strategic investments,” Obama said. The list of recipients varies. Cree of Durham, N.C., the
leading
U.S.manufacturer of sol- id state lighting, received $39 million under the advanced en- ergy manufacturing tax credit to expand capacity and lower pro- duction costs for LED chips use in lights. The Massachusetts Clean Energy Center received $24.7 million from the Energy Department to construct a facili- ty capable of testing wind blades up to 90meters in length; blades that long can only be tested overseas now. And several large companies,
including Florida’s NextEra and CenterPoint Energy of Houston, have received $200 million each to install smartmeters.
More than one way Critics of the stimulus, howev-
er, question whether the money was the most effective way to create jobs. Andrew Morris, a University of Alabama law pro- fessor and senior fellow at the Montana-based Property and Environment Research Center, said neither side of the debate has proved whether this sort of federal spending does or does not sustain long-term employ- ment. “We don’t have any studies,
they don’t have any studies, so I’d say we don’t spend a hundred billion before we have any stud- ies,” Morris said, adding that it’s not a surprise that stimulus funds had created jobs. “The question is,what elsewould have happened to the money? How many jobs would have been cre- ated otherwise?” But the administration sees it
differently. “What it’s proving is clean energy investments are ready for prime time,” said Cathy Zoi, assistant secretary for the Energy Department’s Office of Energy Efficiency and Renew- able Energy. “This is the single largest investment in clean ener- gy this country’s ever had. It is a critical down payment on a tran- sition to a clean energy econo- my.”
eilperinj@washpost.com mufsons@washpost.com
Staff researcher Lucy Shackelford contributed to this report.
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