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State, Local Funds Dropped from DOE Budget

As with most budgets, good and bad news can be found within the president’s recent fiscal request for the Department of Energy.

Overall, the $28.4 billion Fiscal Year 2011 budget request represents a continuing commitment to energy efficiency and the core goals of the Obama Administration as laid out during the campaign. For example, there’s still plenty of money for Smart Meter retrofitting and renewables as well as the electric vehicle battery market.

“The President’s budget cuts wasteful spending while making wise investments in innovation and clean energy that will put Americans back to work, save families money and keep our nation competitive in the global marketplace,” said DOE Secretary Steven Chu in a press release.

Unfortunately, there’s also a lot less help for local governments that previously came in the form of Energy Efficiency Conservation Block Grants. The block grants had been an excellent vehicle for local governments to access without having to dip into their own cash-strapped budgets. Their absence means it will be more difficult for small projects to get through, such as lighting and HVAC, as well as retrofitting. Those areas will suffer losses in coming year and likely create a ripple effect with the companies who provide them. Local governments might find alternative funding sources via a $75 million appropriation to supplement stimulus money for state energy plans as well as increased funding for other programs that will help energy efficiency, such as Weatherization Assistance Program and Clean, Renewable Energy Generation.

The good news: Mid-cap companies still have access to large grants and loan guarantees as sources of low-interest capital to increase manufacturing capability. According to a DOE newsletter, the proposed budget includes $500 million to support an estimated $3-5 billion in loan guarantees for renewable energy and energy efficiency projects, as well as $10 million to support the continued administration of the Advanced Technology Vehicles Manufacturing Loan Program. According to budget highlights, $300 million is also included for the Advanced Research Project Agency – Energy for transformational energy research that industry by itself cannot and will not support, as well as lending authority to support approximately $40 billion in loan guarantees for innovative clean energy programs.

In addition, there’s $35 million for clean energy transmission and reliability, $39.3 million for Smart Grid research and development, and $40 million for energy storage on the electrical grid.

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