Friday, May 15, 2009

Alternative energy stimulus funds slow to charge up industry

By Efrain Viscarolasaga

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President Barack Obama’s administration has made it clear that the development of alternative energy sources and the increase of energy efficiency is a national priority. The American Recovery and Reinvestment Act has allocated some $61.3 billion to energy programs across the nation.

In New England, where state agencies and private businesses are working to build a world-leading cluster of clean tech companies and organizations, the ARRA funding is highly anticipated. Yet the process for accessing such funds remains elusive.

All told, the six New England states are slated to receive almost $600 million in funding related to clean energy, though checks have yet to be written, and application deadlines for individual programs vary.

“We don’t have the authority to spend the money yet,” said Vivek Mohta, director of energy reliability and markets for the Massachusetts Department of Energy Resources (DOER). “When the (federal) government says it has ‘allocated’ funds, there is still a proposal process to go through.”

Under the U.S. Department of Energy’s plan for the stimulus funding, each state is allocated funds for State Energy Programs (SEP), which will be aimed at clean energy projects and efficiency programs at state facilities, as well as be made available for commercial solar, wind, biofuels and other alternative energy sources, at the discretion of the individual state.

In Massachusetts, for example, the SEP has been allocated $54.9 million. Some will be used to “green” state facilities such as administration buildings and university campuses, in a variety of ways, including biofuel usage, efficiency programs and solar power, according to Mohta.

The Massachusetts DOER has set up a fast track request-for-proposals process for commercial clean energy projects, and expects to launch its solicitation within the month. The process of reviewing the projects, which will be judged using ARRA guidelines, will take about six weeks, and the state expects to begin delivering funds in mid-summer, according to Mohta.

In Connecticut, which is expected to receive $38.5 million under SEP, officials will channel most of the funding into existing programs to help get the money into the hands of local businesses, according to Matt Fritz, a special assistant to Gov. M. Jodi Rell. But the state also intends to solicit for new initiatives, such as geothermal and solar thermal.

“Those kinds of programs don’t really exist here in Connecticut, but there is a clear demand for them,” said Fritz, referencing the numerous requests officials have received.

The DOE has also allocated $2 billion nationwide to competitive grants for technology development and other projects by commercial entities. So far, the DOE has issued one formal solicitation, for advanced battery manufacturing and vehicle electrification, with a deadline of this week.

Westborough-based battery maker Boston-Power Inc. expects to be among the applicants under the $2 billion opportunity. Alex Bok, the director of  government affairs for Boston-Power, said that while the process has been grueling, the offering will help the company regardless of whether it wins the funds or not.

“It’s a very complicated process and it’s not very small-company friendly,” he said, adding that the firm’s proposal runs more than 700 pages long and took a host of inside and outside resources to complete.

With financial incentives and grants for clean energy programs expected to also come through the U.S. Department of the Treasury, as well as the DOE, companies like wind developer First Wind Inc. of Newton are looking to the Treasury for application guidelines.“Right now it’s wait and see, but (we expect) the new programs will be very beneficial to helping us finance projects,” said Carol Grant, First Wind’s senior vice president of external affairs.

Clean energy allocations under ARRA

Source: U.S. Department of Energy