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Friday, March 6, 2009
How I See It
Clean tech opportunities and challenges from the stimulus plan
Interactive map of Greater Boston tech layoffs in 2009
MHT's Efrain Viscarolasaga: Preparing the smart grid for more power
MHT reporter Efrain Viscarolasaga on NECN: Green tech brings jobs back to Mass.
The enactment of the American Recovery and Reinvestment Act of 2009, much better known as the federal “stimulus package,” has drawn interest from every quarter of the Massachusetts economy. From workforce investment boards eager to expand training programs, to financial executives anxious about limitations on executive compensation, to radio talk show hosts whose programs will practically write themselves for the foreseeable future, ARRA seems to have something for everyone to love or to worry about.
The clean technology sector may benefit from the stimulus bill more than any other group in Massachusetts. The funding aimed at clean energy is significant. And the timing couldn’t be better. Thanks to recent legislation like the Green Jobs Act and Green Communities Act, Massachusetts is ahead of many other states in its readiness to utilize clean tech funds under ARRA. Also, Massachusetts clean tech companies from seed stage to public companies are encountering funding challenges. The promise of plentiful federal dollars comes at just the right moment.
No wonder clean energy entrepreneurs are already asking how they can get a treasury grant to build a renewable energy project, or a Department of Energy-guaranteed loan. However, despite Massachusetts’ readiness advantage, clean energy companies here face the same challenges as others seeking federal stimulus dollars, including:
• Technology competition. Many provisions of the ARRA leave out the details. As one example, the stimulus package authorizes the federal government to spend $4.5 billion on “smart grid” technology, without specifying exactly what technologies or market opportunities are to be supported. This leaves a lot of room for debate about what the “smart grid” will look like, and for competition for dollars to create it.
• Bureaucratic challenges. Some of the programs funded by ARRA either don’t exist yet or have been unsuccessful. For instance, the package provides $6 billion for loan guarantees aimed at clean energy technology. These funds are an addition to a Department of Energy program established by a 2005 federal law — under which there has been very little activity as yet. Many provisions of the law will also require regulations to be written and adopted before funding programs can be established.
• State participation and oversight. Massachusetts is making progress in implementing its Green Communities Act and Green Jobs Act. But state public and quasi-public agencies will need to redouble their efforts to develop the infrastructure needed to make sure that federal stimulus dollars are spent not only quickly, as mandated by the plan, but also effectively.
The most critical factor may be the communication and cooperation necessary among the cast of players in the state’s clean energy cluster. ARRA seeks to create jobs, build renewable energy projects to help meet our energy needs here, and develop new technology to supply to Massachusetts and the rest of the world. For it to work, and for the Massachusetts clean tech sector to achieve the hoped-for benefits, relevant federal and state agencies will need to identify the most promising technologies, companies and projects to fund. Clean tech companies should review their business plans, identify those federal and state programs that are most likely to be available to them, and consult with advisers on how to pursue stimulus funds most effectively and realistically.
Many experienced in advocating on behalf of progressive energy policies share a view that government commitment to such causes over the years has been halting and sporadic rather than sustained and dependable. The level of government support promised in ARRA is unprecedented, but also unlikely to recur if the results are not perceived to have been worth the investment. The stakes are high: the entire clean tech cluster must engage to plan and execute programs that make it work.
Jerry O’Connor is a partner at law firm Foley Hoag LLP. He can be reached at GOConnor@Foleyhoag.com.
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