By Jackie Noblett
Mass High Tech Staff
Congress’ decision to expand the wildly popular “Cash for Clunkers” program with stimulus funding earmarked for renewable energy projects has some cleantech leaders crying foul.
Congress authorized the transfer of an additional $2 billion to the program that provides rebates to car dealers that take in old, gas-guzzling cars for new, more efficient vehicles, but did so using money that was intended to provide loan guarantees to renewable energy project development. The DOE funds had been seen by many in the alternative energy sector as key to getting pilot plants and commercial scale wind and solar projects of the ground, spurring necessary private financing. Mass High Tech recently reported on the industry’s wait for stimulus cash.
“The ethanol industry understands the trying economic times this country finds itself in and thus supports ideas like the “Cash for Clunkers” program, but is concerned to see the program paid for by depleting the renewable energy loan guarantee program,” said Rob Dinneen, president and CEO of the Renewable Fuels Association, in a statement.
In addition to buoying the sales of Detroit’s Big Three, or more accurately Detroit’s Big One and Washington, D.C.’s Big Two, the program was also designed to reduce the dependence on foreign oil. But that will be difficult to do if alternative energy producers such as ethanol and biodiesel firms cannot get their production plants built in a timely fashion. Furthermore, advocates of renewable energy contend the environmental and economic benefits of clean energy generation outweigh the benefits of more efficient vehicles.
Even members of Congress are questioning the logic of this move. Sen. Susan Collins of Maine and Sen. Dianne Feinstein of California wrote a letter to Transportation Secretary Ray LaHood, requesting data on what kinds of cars are being turned in and what cars are being purchased under the program.
“The tremendous number of sales in the first week of this program demonstrates that the CARS Act has succeeded in increasing new vehicle sales, but Congress needs this data in order to determine if the fleet modernization program delivered significant fuel economy gains and oil savings,” the letter states.
It is clear that Congress is interested in supporting a politically popular stimulus program, but how it did so raises significant questions about the original intensions of the program. A quick restoration of funds for renewable energy loan guarantees would likely resolve those questions.
[Editor's note: This entry is cross-posted and also appears on the Boston Business Journal's blog.]
Posted by dbanks
RSS Feeds
