That ‘failed’ Stimulus: Could it be Working?

If you haven’t already heard it, you will likely hear a great deal in the run-up to November’s elections about what a dismal failure the American Recovery and Reinvestment Act of 2009 (ARRA – aka ‘the Stimulus’) has been.  Pundits, pandits and would-be’s of all stripes are lining up to point out how few of the many billions of dollars allocated by the federal govenment have actually been spent.

This was actually fairly close to the truth until a few months ago, but for that we should, perhaps, be grateful.  Because the ARRA funds were never meant to be loaded onto dump trucks in small bills and emptied out on the lawns of statehouses, no questions asked. At a briefing held by the National Association of State Energy Officials in the U.S. Capitol in July, it was pointed out that the ‘watchdog’ provisions of the act meant that each state had to have approval processes, permits, contracts and other legal provisions completely in place, and work satisfactorily completed, before any money percolated down from Washington to state programs.  And it’s highly appropriate that this briefing focused on the use of ARRA funds for energy-related programs, since it was followed a month later by a very encouraging report by Vice President Biden on the impact of ARRA funds on energy innovation.

State Timeline

Here’s how that state timeline for State Energy Programs (SEP) using ARRA funds worked out:

• Feb 2009: President signs ARRA SEP for $3.1 billion;
• Mar 2009: U.S. Dept. of Energy (DOE) releases 10% of SEP funds to states for planning activities;
• May 2009: States provide three-year plans to DOE;
• Dec 2009: DOE issues guidance on states’ use of funds, including Buy American requirements;
• Jun 2010: States have committed/contracted for nearly 80% of funds ($2.4 billion) for specific projects per DOE guidance.  Actual spending of these funds is ongoing and will continue for balance of three-year plans.

So the money is, despite appearances, being used and used well:  that is, with control and transparency.

Which is the way it should be.  There are many events in the womb of time which will be delivered…

Vice President’s Stimulus Report

And so to the Vice President’s report, released last week via DOE.  It finds that the U.S. is now on track to achieve major science and technology breakthroughs, largely thanks to the Recovery Act.  In fact, according to DOE: ‘the Recovery Act’s $100 billion investment in innovation is not only transforming the economy and creating new jobs, but also helping accelerate significant advances in science and technology that cut costs for consumers, save lives and help keep America competitive in the 21st century economy.’

The innovation breakthroughs identified by DOE include:

• Cutting the cost of solar power in half by 2015, putting it on par with the cost of retail electricity from the grid;
• Cutting the cost of batteries for electric vehicles by 70 percent between 2009 and 2015, putting the lifetime cost of an electric vehicle on par with that of its non-electric counterpart;
• Doubling U.S. renewable energy generation capacity and U.S. renewable manufacturing capacity by 2012.

DOE runs a web site, worth monitoring, that keeps tabs on ARRA-funded clean energy stories.

Effects on Solar

To focus on the solar power breakthrough, the report shows that ARRA funds are supporting the implementation of the latest solar technologies and the scaling up of manufacturing and deployment, both of which help to bring down costs dramatically.  As a result:

• The cost of power from rooftop solar PV panels is expected to drop from $0.21 per kWh in 2009 to $0.10 per kWh in 2015, which is close to typical household electricity rates.  The cost of power from utility-scale solar projects would drop from $0.13 per kWh today to $0.06 in 2015, which is equivalent to the cost of wholesale utility power.
• The cost of rooftop solar power could drop even further, to as low as $0.06 per kWh by 2030. At that point, solar power will be significantly cheaper than household electricity rates, and an average household could save more than $400 per year in electricity bills.

There’s also evidence that companies are reducing costs simply by scaling up manufacturing and deployment of the standard silicon solar panel. For example, the largest photovoltaic power plant in North America, the 25 MW DeSoto Solar Park in Pensacola, Florida, was funded in part by the Recovery Act. The power plant consists of over 90,000 solar panels and provides enough power for 3,000 homes.

So those much-maligned ARRA monies appear to be having a beneficial effect, even if the need for transparency and appropriate controls give rise to a glacial pace of implementation.