PV loans survive US budget cuts for FY2011

12 Apr 2011

But the Department of Energy will have to make significant cuts to its energy efficiency and renewable energy program.

Early indications suggest that cuts to US federal spending will result in both good news and bad news for photonics-related businesses in the country.

The deal hammered out between the House, Senate and White House over spending in fiscal year 2011 – which ends on September 30 – will result in $39 billion cut from the President’s original budget request.

That represents the biggest overall non-defense reduction in spending since World War II, and, once signed into law will at least mean that the government does not shut down.

The legislation will support existing applications for renewable energy loan guarantees from the Department of Energy (DOE) – good news for the photovoltaics companies who have applied for financial assistance under the scheme. That would include loan guarantees to First Solar, SoloPower and Solyndra, for example.

The Solar Energy Industries Association (SEIA) reacted positively to the news, saying: “To date, this program has provided loan guarantees to more than 20 clean energy projects representing more than $40 billion in private investment. With the program now secure, developers of solar power plants and manufacturing facilities have the policy certainty necessary to move forward with their projects."

“The campaign to save the loan guarantee program was a sustained effort by SEIA and the solar industry to show a bipartisan group of congressional leaders the value that this program brings to their districts and states," added the trade association in a statement.

"In particular, Senators Dianne Feinstein and Maria Cantwell championed the program along with the continued leadership from Majority Leader Harry Reid. Representative Laura Richardson spearheaded a bipartisan letter that was also signed by Representatives Brian Bilbray, Mary Bono Mack, Duncan Hunter, Jerry McNerney, Adam Schiff, Bob Filner and Grace Napolitano in the House of Representatives."

However, the DOE also loses out in other areas. Overall, spending on energy and water will be set at $31.8 billion, a 10% reduction ($3.6 billion) on the President’s original request for fiscal 2011. A significant chunk of that saving will come from huge cuts to the DOE’s energy efficiency and renewable energy program - of which the SunShot Initiative is a part.

According to a House Appropriations Committee spreadsheet detailing the various cuts, that program will receive $550 million less in FY2011 funding than had been requested, and $438 million less than had been spent in fiscal year 2010. The Office of Energy Efficiency and Renewable Energy funds a wide range of energy schemes, of which solar is just one.

In other areas that may have an impact on photonics activity, the Department of Defense largely escapes the cuts made in other areas, with a 1% increase in funding over FY2010 to $513 billion, of which $75 billion is set for research and development.

Meanwhile the National Science Foundation’s research effort faces a $444 million cut from its FY2011 request ($43 million down on FY2010), and the National Oceanic and Atmospheric Administration is faced with a shortfall of $849 million (a $23 million reduction on FY2010).

The precise nature of those cuts, and exactly which programs will be affected, is expected to be decided over the next 30 days, following the passage of the budget bill through the US political system.