A proposal to overhaul the way the government supports clean-energy development is winning plaudits from business groups and some key Republican lawmakers, at a time when the looming expiration of clean-energy subsidies threatens the entire sector.
The plan, to be unveiled by three think tanks Wednesday, recommends “targeted and temporary” support to roll out clean energy, rather than today’s model where energy developers get subsidies for years with little or no incentive to improve the technology. The report also suggests a sliding scale so that subsidies decline over time as technology improves.
Despite years of federal support, including more than $100 billion in federal money in the past three years, most forms of clean energy such as wind and solar power are still dependent on subsidies for survival, and some of those subsidies are set to soon be phased out. The plan, drafted by energy experts from the Breakthrough Institute, the Brookings Institution and the World Resources Institute, says that expiration of subsidies is a good time to change clean-energy policy and link subsidies to improvements in cost.
“That’s what’s going to be key to competing with Chinese manufacturers, to making sure that the cost of these subsidies declines over time, and ultimately, that these technologies can stand on their own,” said plan co-author Jesse Jenkins of the Breakthrough Institute, a left-leaning group that has long advocated technology advances to promote alternative energy.
The new proposals offer a way to court Republicans who have soured on traditional government support for alternative energy, especially after last year’s bankruptcy of Solyndra LLC, a solar-panel maker that received federal loan guarantees. The plan also calls for boosting the federal investment in energy research and development, something that Democrats have traditionally supported.
“You basically have to make things cost competitive or they aren’t going to work,” said McKie Campbell, the Republican staff director for the Senate Energy and Natural Resources Committee. He added, “It’s clearly against our national interest to engage in long-term subsidies where the moment you pull the subsidy,” businesses fail.