Solar recovery: A worker at a New Mexico plant owned by the German company Schott Solar inspects a solar receiver, which absorbs concentrated sunlight to help generate electricity. The plant has increased its workforce in part because of last year’s Recovery Act.
Schott Solar
The money has helped the solar and wind industries, but hasn't created many manufacturing jobs.
In the year since it was enacted by Congress, the federal stimulus bill has helped the solar and wind markets grow in the United States, but has done relatively little to boost domestic renewable energy manufacturing.
Last February's stimulus bill, aka the American Recovery and Reinvestment Act, allocated $45.1 billion for renewable energy, energy efficiency, and other energy-related programs and incentives. As expected, due to the multiyear nature of many of the projects, most of that money hasn't been spent yet. For example, of the $36.7 billion the U.S. Department of Energy has to spend, so far it has distributed just $2.4 billion (although it's announced awards totaling $25.4 billion).
But the money that has been spent on renewable energy--and the anticipation by investors of more to come--has helped increase the size of the solar and wind markets in the United States. The biggest help has come from grants for building renewable energy projects, such as solar and wind farms. This money--$2.3 billion has been spent so far--helped turn around what was expected to be a dismal year for wind and solar markets in the United States, says Edward Feo, a partner in the law practice of Milbank Tweed Hadley & McCloy. Feo says that experts expected the wind market to drop sharply in 2009 because of the poor economy and tight credit markets. Most presumed there would be half as many installations as the year before. Instead, wind installations increased from about 8,000 megawatts of wind power in 2008 to almost 10,000 megawatts in 2009, he says.
Similarly, the solar industry continued to grow last year. So far the grants have allowed 182 solar energy projects, according to the Solar Energy Industry Association. Altogether, stimulus-related incentives have created 18,000 jobs in the United States, the association says.
The impact of the stimulus is expected to be even greater this year. Last year, the grants were only available for the second half of the year; they'll be available for the whole of 2010. What's more, none of the loan guarantees that had been authorized by the stimulus for renewable energy projects have been issued so far. Such loan guarantees, some of which are expected this year, could be key for some projects to get financed, says Feo. This is especially true for large-scale solar thermal power plants. (There have been a few loan guarantees issued from a 2005 energy bill, such as one to the solar company Solyndra, and another to Nordic Windpower.)
Attacks on the wisdom of loan guarantees could restrict nuclear reactor construction in most states.
Government incentives and lower solar prices are starting to pay off.
The very word Stimulis makes me sick. Although some of these things (RE renewable enegry) need to be addressed, the whole idea of stimulis is ALL wrong. No one in their right mind would go out and buy a new car the day after they have just lost their job.....and yet, that is exactly what we are doing...God Help us...we're all going to need it. stupid stupid stupid.
LOL!
If it weren't for the stimulus the US would be in a depression by now.
This isn't anything like buying a new car after losing your job. The stimulus was recommend by nearly all credible economists.
The only sickening thing here is your ignorance.
seriously???!!! you belive that???!!! deluded. the porkulus has done nothing positive for this country. it shuffled pork to Congressional districts and it (according to the article above) diverted Federal funds (i.e. your tax dollars) overseas to places that actually make solar components like Germany and China. pathetic. the recovery was already happening before ARRA was passed, and the only reason that it has not accelerated is the fear inspired by the Obama Administration's heavy regulatory hand. why is unemployment sitting at 10%? not because we didn't spend enough tax money to create jobs, but because no businessman in his right mind is going to go on a hiring spree when he has a double-barreled tax shotgun pointing at him.
A huge part of the stimulus started under Bush bailing out AIG. If not for that, we'd be deep in depression -- no insurance, no transactions, no business, no jobs. So, clearly the main part of the stimulus was crucial.
I would then (perhaps agree?) that I would rather the bulk of the stimulus be put into research that really will build the next economy: battery technology, Thorium breeder reactors, civilian robotics that could bring manufacturing back.
Finally: regulation. It seems to me these crashes happen every time we allow big institutions to leverage their money too much. I would simply cap this so that institutions can really cover their bets.
"A huge part of the stimulus started under Bush bailing out AIG. If not for that, we'd be deep in depression -- no insurance, no transactions, no business, no jobs. So, clearly the main part of the stimulus was crucial."
that certainly was the conventional wisdom at the time, but it is far from clear that it would have played out that way. either way, by the time President Obama rammed ARRA down everyone's throats, it was simply $787B worth of pork. the article refers to the 1 year anniversary of the "stimulus", so he must have been referring to the porkulus bill called ARRA, and not the preceding bailout (which still was excessive, even if some of the targeted bailouts were needed).
"I would then (perhaps agree?) that I would rather the bulk of the stimulus be put into research that really will build the next economy: battery technology, Thorium breeder reactors, civilian robotics that could bring manufacturing back."
but then it does not "stimulate" in the Keynesian sense. the idea (discredited though it may be) is that govt must make up for contractions in private spending with public $. if you are a Keynesian, that is what justifies the spending. if you are not Keynesian, there IS NO justification for the spending. no matter what side of the argument you select, the investment you discuss is sensible, but will not turn around a recession. it is reasonable to make public investments in future technologies that will benefit the economy, but are not close enough to market to receive private investment. that is why Federal $ have traditionally gone more toward basic research. nonne of the items you mention are near-term payoffs; they would all create growth well outside the time frame of a recession.
"Finally: regulation. It seems to me these crashes happen every time we allow big institutions to leverage their money too much. I would simply cap this so that institutions can really cover their bets."
ah, naivete. you need to review a little history here. our beloved elected officials have done exactly that each time this has happened, and guess what? the next event happens when the money guys find a slick new way to work around the rules, or talk the Feds into loosening things up. the fact is that restrictions will hamper the economy from growing, and will only address the specific failure modes that have been observed in the past. the balance is very hard to achieve, and results in some hunting and overshoot, just like in any control system.
Effectiveness of Government Stimulus Spending on Renewable Energy
Everyone’s talking about how the stimulus spending will create “green jobs”. I have my doubts about the longevity of these jobs as well as the unintended side effects elsewhere in the economy. I hope that the U.S. will become and remain the foremost global competitor in renewable energy industries, but I worry about how we will get there.
The rationale for stimulus spending during a recession is founded on Keynesian economics, i.e., countercyclical spending by government to smooth out the economic cycle. This theory had largely fallen out of favor, until recently - desperate times, require desperate measures. I hope it will work, but note that most experts tell us that the biggest long-term problem for the U.S. economy is the large and growing Federal Government annual deficit/long-term debt. Keynesian policy assumes that governments run a surplus during the expansion years (typically about 5 years out of a 7-year economic cycle) and can then afford to run a deficit for the two bad years. On the long-term, government debt doesn't grow, at least not any faster than the economy. The U.S. economy doesn't look anything like this.
The U.S. has created, dominated, and then lost one manufacturing industry after another. Unless the underlying reasons for these unhappy endings are identified and dealt with, it's hardly surprising that so called "green manufacturing" jobs end up in other countries. Even if government spending succeeds in creating a large and permanent domestic market for renewable energy, manufacturing will be done where it makes most sense. Let’s figure out how to make that happen here. Subsidizing non-competitive industries doesn’t seem like the way to do it. (Some say we need government spending because it’s a “chicken-and-egg problem” to build renewable markets and industries. Has this been proven in other industries? If so, then maybe it’s worth a try but don’t let’s bet the farm!)
What the advocates of government “green” stimulus spending seem to miss, is that every dollar spent by government on green jobs, and every extra dollar spent by consumers to buy government-mandated, higher cost, green energy, equals a dollar not being spent on other products. Governments can't create jobs, at least not in the long-term. Given: 1) the state of government finances; 2) our track record of creating and subsequently losing manufacturing industries; and 3) the fact that renewable energy generally costs more at this time than conventional energy, we must be very careful about how public funds are used to stimulate the renewable energy industry (and everything else). Perhaps our attention should be focused on how R&D and other types of knowledge generation can make our industries globally competitive.
Re: Effectiveness of Government Stimulus Spending on Renewable Energy
superbly put. the only item I would change is that Keynesian economics has not simply been out of favor. it is thoroughly discredited, and has been for a long time. simple observation shows that the US economy simply doesn't work that way. I would also note that in addition to the negative impacts that you noted (spending on this sector in lieu of another by both consumers and the govt), there is the second-order effect of reduced liquid assets available to the consumer to use for any purpose, due to locking more of their $$ up in taxes. it is a double-whammy that is consistently negative in terms of its effect on economic growth.
Re: Effectiveness of Government Stimulus Spending on Renewable Energy
"The U.S. has created, dominated, and then lost one manufacturing industry after another. Unless the underlying reasons for these unhappy endings are identified and dealt with, it's hardly surprising that so called "green manufacturing" jobs end up in other countries."
Your remarks here hit a nerve with me. I agree wholeheartedly we had these industries and yet lost them to overseas competition. I work in the Rust Belt and for YEARS have heard we have unfair competition, yet the companies whining are the same ones who moved their businesses over seas for cheaper labor and less regulations. The next wave of moves will be the Engineering of our products, so we'll lose the Intellectual Capital as well. It's already started, so don't be too alarmed when we can't fill our own domestic needs and have to contract with other countries to get a product designed and manufactured.
I asked my management to cite chapter and verse about these so called unfair practices, and guess what! NOBODY HAS RESPONDED!!
So not only as a worker-bee, but also a consumer of hard goods and services - looks like nobody who can make a difference gives a rip. Perhaps those foreigners have a better handle on how to buy influence in Washington, and big business will remain indifferent until such time we actually outsource or offshore our politicians and C-Level management. Only when they are sitting in our seats or filling our shoes will they see the light.
Re: Effectiveness of Government Stimulus Spending on Renewable Energy
It strikes me as supremely ironic that our universities are filled with foreign students who gladly partake in their educations here and often take those skills back home to compete with us. It seems obvious that at least one tool in stopping this kind of hemorrhaging would be to dramatically increase the tuition for foreign students to subsidize the tuition of domestic ones while providing incentives for highly educated graduates to stay in the US.
We also need to do far more at the pre-college levels to educate our children in the subjects that prepare them for technology, namely math and science. We are failing miserably in this area.
Re: Effectiveness of Government Stimulus Spending on Renewable Energy
I am not sure that the preparation is lacking. I think it is the motivation. when I was a kid, we dreamed of being the guy that invented something or built something. now it seems that the kids dream of selling something, or playing a sport, or being on TV/movies (note I didn't say "acting" - "reality" TV killed that). there are lots of great programs out there to teach science, math, and engineering; my son has participated in them. it seems there is just not enough interest because everyone wants their kid to be a banker or businessman or celebrity.
Manufacturing in the United States is in trouble. That's bad news not just for the country's economy but for the future of innovation.
Our list of the 50 most innovative companies, including the following:
On Twitter
Become a Fan on Facebook
Subscribe to the Feed
dancrissco
54 Comments
Capital Projects Take Time to Mature
Capital Projects take time to mature and make an impact. I personally feel that the impact on the energy stimulus packages will make a positive impact in a few years. We have to be patient and continue on a sustainable energy future.
Reply