By Renewable Energy Focus staff

Although the stated aim is to “win the future by out-innovating, out-educating and out-building the rest of the world,” several programs are seeing cuts.

“The United States faces a choice today: will we lead in innovation and out-compete the rest of the world or will we fall behind? To lead the world in clean energy, we must act now. We can’t afford not to. Through our investments, we are laying the groundwork for the nation’s future prosperity and security,” Energy Secretary Steven Chu says.

“While we are investing in areas that are critical to our future, we are also rooting out programs that aren’t needed and making hard choices to tighten our belt. Additionally, we are improving our management and operations so we function more efficiently and effectively.”

Highlights of the FY 2012 Budget:

  • US$3.2bn for energy efficiency and renewable energy programs;
  • US$300m in credit subsidies to support approximately US$3-4bn of renewable energy and energy efficiency projects;
  • US$36bn loan guarantee to jumpstart domestic nuclear;
  • US$5.4bn for the Office of Science to expand investment in basic energy sciences;
  • US$550 million for the Advanced Research Projects Agency-Energy (ARPA-E) to support early-stage, clean energy projects;
  • US$146m to support three existing Energy Innovation Hubs and to establish three more in the areas of batteries and energy storage; smart grid technologies and systems; and critical materials;
  • US$100m to support 46 Energy Frontier Research Centers started in 2009; and
  • A five year request for nearly US$65bn for the National Nuclear Security Administration (NNSA).

However, as the US Government aims to reduce the budget deficit, several programs and projects are also facing cuts.

Proposed Cuts Include:

  • A 40%, or nearly US$70m, reduction in funding for the hydrogen technology program to rather focus on technologies deployable at large scale in the near term;
  • Operation of the Tevatron (circular particle accelerator) will be ended saving US$35m;
  • The budget for the Fossil Energy Office will be reduced by 45%, or US$418m – zeroing out the Fuels Program, the Fuel Cells Program, the Oil and Gas Research and Development Program, and the Unconventional Fossil Technology Program;
  • Repealing a number of subsidies and tax preferences for fossil fuels; and
  • Reduce administrative expenses across all programs.

Many in the industry doubt that all the proposals will go through Congress, which has to approve the budget. The Republicans in the House of Representatives, for example, have in the budget for the rest of the current fiscal year proposed to slash funding to the Environmental Protection Agency (EPA), a high-speed rail plan and renewable energy and energy efficiency programs.

SEIA Welcome

Rhone Resch, President and CEO of the Solar Energy Industries Association (SEIA) welcomes the budget proposals, saying the budget is “helping to lay the groundworks for a level playing field that allows solar energy to compete with traditional fossil energy sources that have received substantial support from the Federal Government for decade after decade.”

He continues: “If this budget is enacted, I expect the solar industry to more than double in 2012, creating tens of thousands of good-paying solar energy jobs. And as the industry grows, our costs continue to decline helping to make solar the best economic choice for taxpayers across the country.

“The President’s budget makes a targeted investment in the Department of Energy Loan Guarantee Program, adding US$200m to spur development of utility-scale solar and solar manufacturing facilities.

“The budget also extends the highly successful 1603 Treasury Program for one year,” Resch says.