You’ve probably already heard the news this week about a clean energy company that received a government grant filing for bankruptcy. What you may not have heard quite so clearly is that clean tech is working, for the United States and our transformation to a better, stronger, cleaner energy future.
Yesterday’s announcement from A123 Systems needs to be viewed in the context of federal government support for clean tech to jump-start this sector, and the performance of the industry as a whole.
Many More Winners Than Losers
An important context is one of the main points of the government programs in question: making investments to drive innovation and progress in important areas for the United States. Congress expected to see winners and losers when it passed the relevant legislation in 2009, and the program as a whole has seen far more winners than losers so far. As the Washington Post’s Brad Plumer says, for example:
To date, 30 battery and electric drive firms have received stimulus funding. A full list is here. Two of them, A123 Systems and EnerDel, have filed for bankruptcy so far. (They haven’t disappeared, however: EnerDel continues to operate and A123′s stimulus-funded facilities will remain open under the deal with Johnson Controls.)
Those two companies represent 18% of the vehicle battery grants, which means that 82% of that portfolio is still “performing”.
Plumer also offers as context another stimulus-funded program that’s gotten a lot of attention but has an even more impressive performance to date:
In a similar vein, of the 26 clean-energy projects that have received federal loan guarantees under a separate 1705 program, just three have filed for bankruptcy, including Solyndra, Abound, and Beacon Power. (Though Beacon is still operating and has largely paid back its federally backed loans.)
Even the full amount at risk from those three companies adds up to 6% of the portfolio, meaning that the performing piece of the investments is 94% of the whole.
The Broader Context
Another context in which to consider these developments is what’s happening to renewables in general. In short, as UCS’s president Kevin Knobloch has pointed out, throughout the economic downturn, renewables “have delivered”:
In response to targeted but limited investment (e.g. wind and solar production tax credits and stimulus spending) and policy tools (e.g. renewable electricity standards, now in place in 29 states), the nascent wind and solar industries have delivered. Over the last five years, the wind and solar sectors have doubled their electricity output, employment and private investment.
This summer, our collective investments in wind power brought U.S. installed capacity to more than 50,000 megawatts, enough to power almost 13 million homes — “as many as in Nevada, Colorado, Wisconsin, Virginia, Alabama, and Connecticut combined”, according to the American Wind Energy Association.
The story is similar elsewhere in the world: renewable energy has been going great guns globally, despite worldwide economic challenges.
Investments in clean energy and clean tech can bring with them jobs and other economic benefits. They also are key to moving us away from dependence on fossil fuels—oil, coal, and natural gas—and the climate change troubles they bring with them.
Beyond the Political
Despite assertions to the contrary, support for clean tech in the U.S. has been and continues to be bipartisan, as Klein and a UCS colleague point out. The same has been true for A123, as the U.S. Department of Energy reports:
A123’s promising technology has a long history of bipartisan support. In 2007, the company received a $6 million dollar grant as part of the Bush Administration’s efforts to promote advanced battery manufacturing, and the company has used $132 million of a 2009 grant from the Department of Energy.
Some will want to politicize a few failed companies, but don’t be fooled. Investments in the clean tech—private and public—are what we need to get to a responsible, viable, thriving energy future, one that strengthens our economy, enhances our security, and addresses the huge challenge of climate change. Our greatest investment risk comes from not investing boldly enough.