New Year Brings Increased Funds for Clean Energy Innovation

The bill that Congress passed to fund the government through September 2020 includes significantly increased funding for clean energy innovation programs at the U.S. Department of Energy (DOE), soundly rejecting the Trump administration’s proposed cuts and allowing the enormous benefits of these federal programs to continue to flow to the American people.

The bill, which the president signed, raises funding levels for highly beneficial energy efficiency, renewable energy, and clean transportation programs. It also gives DOE staff more specific direction and guidance to effectively get the money out the door and into the hands of the nation’s top innovators over the next nine months.  

Though this blog focuses on DOE programs, the bill also updated some clean energy tax provisions. However, it failed to include extensions of a wide set of highly successful clean energy incentives—and, in doing so, missed an opportunity to make important progress in the fight against climate change.

The bill protects programs under threat from the president

The president’s budget proposed a debilitating 86 percent cut in funding to the Office of Energy Efficiency and Renewable Energy (EERE) and called for elimination of popular and impactful programs such as the Advanced Research Projects Agency­–Energy (ARPA-E) and Weatherization Assistance.

Congress sent a much better DOE budget back to the president’s desk, with robust increases in funding and continuation of key programs. Highlights of the bill include:

• EERE received a 17 percent increase in funding, instead of the president’s proposed 86 percent cut. EERE houses the bulk of DOE’s work on renewable energy, energy efficiency, and clean transportation. These programs have been instrumental in developing and commercializing clean energy technologies that are now key building blocks of a clean energy economy and for combatting the climate crisis. These programs have been an incredibly smart investment—third-party evaluations have estimated that EERE programs have yielded more than $33 in benefits for every $1 invested.

• Congress raised ARPA-E’s budget by 16 percent. ARPA-E invests in potentially transformational clean energy projects that are not supported by the agency’s other programs. Since 2009, ARPA-E has provided greater than $1.8 billion in R&D funding to more than 660 projects that have led to the formation of 71 new companies and have raised more than $2.6 billion in private-sector follow-on funding. These companies are commercializing the next generation of clean energy technologies that will help cut pollution from our energy system.

• The Weatherization Assistance Program received a 20 percent bump. This program is one of the agency’s only clean energy deployment programs and DOE’s primary vehicle for supporting low-income households. WAP has reduced energy costs for more than 7 million low-income households across all 50 states by improving energy efficiency through such measures as air sealing and more insulation. The program supports 8,500 jobs and provides weatherization services to approximately 35,000 homes every year. Once weatherized, those households save an average of at least $283 annually.

• Congress protected the Loan Programs Office, which has provided more than $30 billion of loans and loan guarantees over the past decade for more than 30 projects—ranging from solar technologies to wind farms—in order to bridge gaps between testing and commercialization of new technologies.

Detailed program direction helps ensure DOE spends new funds

Unfortunately, funding from Congress has not been enough on its own to ensure that this administration’s DOE spends its appropriated money in a timely and effective manner. In the past three years, DOE leadership has canceled solar energy grants at the last minute, delayed EERE and ARPA-E funding from getting to researchers, and illegally withheld $91 million in ARPA-E funds. These cancellations and delays go against the intent of Congress and prevent researchers and businesses from continuing their crucial work to advance clean energy technologies.

The report language in annual funding bills guides the agency’s work and justifies the grants issued by DOE staff. With the current administration attempting to kill DOE’s clean energy programs, specific report language is more important than ever to ensure the agency properly and effectively spends its appropriated money.

The recently passed bill included specific language that hopefully will help prevent DOE leadership from misusing or withholding clean energy funds. For example, the bill directs DOE to issue a grant for research to improve an innovative form of solar cells that can be manufactured in mass production facilities, instead of simply providing general direction for DOE to pursue solar cell research. It also requires the agency to produce a roadmap for cutting carbon pollution from the U.S. industrial sector, a necessary step toward a sharper agency-wide focus on addressing climate change.

Congress also directed DOE to address a staffing shortage that’s inhibiting its clean energy—and other programs. Due to new roadblocks to hiring implemented by DOE leadership, EERE and other offices are short-staffed, making it difficult to spend the appropriated money in the most effective manner. The recently passed bill gives DOE 30 days to make a plan to reach an adequate number of employees to manage the energy innovation programs by the end of September of this year. We hope Congress continues to keep close eye on DOE to make sure the agency follows through on lawmakers’ intent.

The work doesn’t stop here

The year-end funding bill was a win for DOE’s clean energy innovation programs. But if they are to match the scale of the climate crisis, these programs need a comprehensive update to their “mandate,” not just an increase to their annual budget. Congress provides long-term direction to DOE through authorizing legislation, which defines the mandate for agency programs. The congressional mandates for many of the innovation programs have not been updated in nearly 15 years.

As we detail in our recent report, Congress should promptly update the authorizations for DOE’s clean energy programs, including by dramatically increasing funding; making combating climate change a goal of the agency; prioritizing projects that advance energy justice and social equity; and expanding demonstration and deployment programs.

Failure to do so will continue to hamper the work of the agency that could—and must—make groundbreaking progress to fight the climate crisis.