The dollars are flowing to companies large and small. Automotive start ups like Tesla Motors and Fisker Automotive, companies with little track record and no profits to speak of, have scored nearly $1 billion combined in guaranteed loans. Meanwhile established car companies like Ford and Nissan have been granted $5.9 billion and $1.6 billion respectively to further development of electric vehicles. That’s in addition to the government’s purchase of General Motors at a cost of tens of billions of dollars.

Outside the auto industry we’ve seen companies such as Solyndra, a solar power start up based in Silicon Valley that qualified earlier this year for a $535 million DOE loan guarantee. Prior to the loan guarantee Solyndra had been funded to the tune of $800 million in private venture capital financing. At the beginning of September the DOE also announced over $500 million in grants given mostly to large wind power developers. Since then many large utilities across the country have benefited from over $3 billion in smart grid stimulus awards. More recently the DOE has announced more than $600 million for energy storage projects.

If you look at the entire list of what has been funded so far you’ll see that no technology has been left behind. Electric vehicles, solar, wind, smart grid, geothermal, energy efficiency, energy storage  and carbon capture have all received funding. Thus one of the biggest obstacles to the development of new clean energy technologies has been removed. The collapse of the credit markets and oil prices dried up the investment pot. But the U.S. government has stepped in to fill the vacuum. So companies now have access to the capital they need to develop better batteries, construct manufacturing plants, research future technologies and much more.

With the financing obstacle removed for many companies, the only thing that’s left for companies to do now is to deliver on their promises. Electric car manufacturers have promised affordable vehicles that eliminate (or greatly reduce) the need for gasoline use in day-to-day transportation. Solar producers have promised gigawatts of solar facilities across the deserts of the southwest and rooftops across America. Wind power developers have promised clean, reliable, emission free electricity with very low impact to the environment. Smart grid companies have promised a new age of energy information technologies that will virtually eliminate blackouts and give consumers unprecedented control over their energy use and costs. Geothermal developers have promised a vast supply of emission free, uninterrupted baseload power from deep below the surface of the earth. On top of all the promises we’ve heard many times over the past decades there is also the promise of millions of “green jobs” as a result of a new clean energy economy.

The billions of dollars in play right now may only represent a down payment on future possibilities for clean energy development in the United States. Results are important though. If you have an investor who throws in a million dollars most of the time they want to see some progress before they commit more money. In this case the investors are the American people who’ve heard promises about the benefits of affordable electric vehicles and solar technology for decades. If public support for new energy investment erodes in 2010, politicians, especially ones up for re-election, will get the message and adjust their influence accordingly. That’s why it’s so important that clean energy companies show that they can produce the technologies they have promised, with the benefits that they have promised, at a cost that the majority of the public can afford.

The latest Energy In Brief posting by the Energy Information Administration (EIA) is very instructive on the topic of U.S. government subsidies for energy. I consider it recommended reading for anyone who wants to understand the level of government investment and how it effects energy production in the U.S.

In total, renewable energies were subsidized to the tune of $4.8 billion in 2007. That number put renewable subsidies ahead of any other type of energy source by over $2 billion.

There is detail on the amount of subsidies per unit of production as well. Wind producers were paid $23.37 per megawatt hour. Solar producers were paid $24.34 per megawatt hour. Biomass and Geothermal were subsidized at a very paltry rate of $.89 and $.92 per megawatt hour respectively.

The posting covers all types of subsidized energy and also includes comparatively generous subsidies for refined coal ($2.37 billion) and natural gas ($2.149 billion). Because coal and natural gas are so heavily relied upon for electric generation the cost per megawatt hour for either of them is very low. Natural Gas is subsidized at $.25 per megawatt hour and Coal is subsidized at $.44 per megawatt hour.

The wind industry was the largest beneficiary among renewable industries having received $666 million in production credits in 2007.

According to a story on EurActiv.com, Gordon Brown and Nicolas Sarkozy are supporting a plan that would involve the construction of massive solar plants in North Africa. Energy from the plants would be delivered to European consumers via a new high voltage direct current (HVDC) transmission system.

The idea is based on the construction of a €45 billion high voltage direct current (DC) grid that could transfer electricity produced by Saharan and North African solar installations to consumers thousands of kilometres away. The construction of a new DC grid would be necessary since most of the EU’s existing power grids operate on the basis of alternating current (AC) and as such lose too much electricity over long distances to make such a project viable.

To call this plan incredibly ambitious would be an understatement. Between the price tag and logistics it is likely that such a project would take many years to actually complete. The idea of using HVDC to transport reneweable power over long distances is becoming a popular one. The state of California is investigating the prospect of accessing clean energy from Vancouver, British Columbia.

On May 29, 2008 the Bureau of Land Management (BLM) announced a temporary moratorium on applications to site solar projects on public lands. According to the statement issued by the BLM, ““Preparing a programmatic EIS is a necessary first step in evaluating to what extent public lands with high solar energy potential may be able to help meet the Nation’s need for renewable energy…”

This temporary moratorium might be alarming if there was no good reason for it. But there is a good reason. The surge of applications to site solar on public lands has created the need for such evaluation. As it stands there are 125 projects for land covering almost one-million acres in the BLM queue. If those projects were to be completed the resulting energy output would be enough to power 20 million American homes.

The existing applications will continue to move forward during the programmatic EIS process. According to the BLM statement, “During work on the PEIS, the BLM will focus attention on the 125 applications already received for rights-of-way for solar energy development, while deferring new applications until after completion of the PEIS. ” In short, there are plenty of solar projects to be evaluated and developed. Also consider the fact that the scope of these projects does not include many private solar projects that are taking place all over the country.

Most people don’t understand that there is more to locating a solar plant than just dropping panels onto the ground. Consider the issue of connecting all these solar projects to the grid. Transmission line construction will be required. And you can bet your bottom dollar that such construction is likely to be opposed by many of the same groups that criticize the programmatic EIS in the first place. The process announced by the BLM can address some of the issues that are likely to be debated before companies invest millions into projects that become hampered by the protests of environmental interest groups.

The U.S. government has the obligation to perform due diligence to ensure that solar energy projects sited on public lands are feasible. This program, if operated consistent with the stated plans, assists the government in meeting that obligation while affording them the ability to focus on the robust queue of current requests.

Government of Canada Invests Over $13.6 Million in Vancouver’s Fuel Cell Industry “The Government of Canada today announced a $13.6 million investment in the National Research Council (NRC)’s Vancouver-based fuel cell and hydrogen industry and officially opened the Hydrogen and Fuel Cell Gateway”

DOE Makes up to $60 Million Available for Concentrating Solar Power Research “DOE announced on April 30 that they would provide up to $60 million for concentrating solar power (CSP) projects in the areas of advanced thermal energy storage or heat transfer fluids, with funding options for both new research and development and demonstrations of technologies already under development.”

Solar Thermal Startup SkyFuel Scores $17M “SkyFuel, an Albuquerque, N.M.-based company that has created a cheap, light material called “ReflecTech” for its sunlight-catching troughs, has raised $17 million in a Series B round of funding from Leaf Clean Energy.”

Ireland’s NTR makes $150-mil investment in US’ Wind Capital Group “Dublin-based NTR, a developer and operator in renewable energy and sustainable waste management, is investing $150 million in Wind Capital Group, a St. Louis-based wind developer, the companies said Thursday.”

Follow all of the clean energy investment news that I pick up around the web by bookmarking my link account at http://del.icio.us/cleanenergydigest/investments.

• U.S. Department of Energy Invests in Solar Cities – Twelve cities have been selected and will receive $200,000 each, “to integrate a variety of solar technologies, such as solar water heating, solar photovoltaic electric systems, and large-scale solar thermal electric systems, which are also known as concentrating solar power.”
• Southern California Edison Will Install 250W of Solar Panels – Spread out over the next five years, “The project is the nation’s largest solar photovoltaic project, covering 2.33 square miles of rooftop at an estimated cost of $875 million.”
• PG&E Enters Into 900MW Solar Contract – The California utility, “has contracted with BrightSource Energy Inc. to receive up to 900 megawatts worth of solar power per year.”

Solar stocks moved briskly northward this past week as well. First Solar (FSLR) was up 21%. Evergreen Solar (ESLR) was up 17.6%. SunPower (SPWR) Corporation was up 22.7%. PowerShares Wilder Hill Clean Energy Fund (PBW) was up 9.5%.

Solar has an advantage over wind power in many areas of the United States because installations have a very low footprint compared to windmills. Solar technologies can also be implemented in urban areas without any cause for alarm. On the downside, solar effectiveness depends on a strong concentration of sun’s rays that is only evident in a small percentage of the U.S. footprint.

Worldwide demand for solar is growing though. And the investment due to this demand will assist with improvements in solar technology that will benefit the U.S. as well.

Disclosure: I own shares in the PowerShares Wilder Hill Clean Energy Fund.

Evidence of Google’s solar array is not hard to find. Using the Google Maps service I was able to zoom in on the headquarters via satellite and inspect the rooftops of their headquarters buildings which indeed are covered with solar panels.

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If you want to hear more about what’s happening on the cutting edge of clean technology then I suggest you give this one a listen. You can get future episodes automatically by subscribing to their iTunes podcast.

The Technology

Solar energy harnesses the rays of the sun to provide heat, light, hot water and electricity to homes and businesses. Typical systems use solar cells to capture the suns rays and turn them into electricity. Basic versions of solar cells can be found in calculators, garden lighting and even new laptop computers. Solar technology can be used to provide power for very small systems, homes, businesses and all the way up to electric utility level generation.

The Possibilities

Solar is one of the great untapped clean energy sources. Solar systems can be built small enough and light enough to fit almost any home in areas where sunlight is plentiful. One need only look to the applications for solar in U.S. space programs to see that solar energy still has a long way to go when used for more conventional applications.

The Challenges

Traditional solar cells made from silicon are quite expensive. As such, the cost of large scale installation and system maintenance is difficult to recover in a reasonable period of time. Larger scale solar energy applications are only practical in areas that receive large amounts of direct sunlight.

The Outlook

The solar energy industry requires a great deal more investment in order to create systems that are reliable and affordable on a large scale. Money is moving into the space though. And while I don’t think that we will see solar power as a significant source of energy in the near future, you can bet that recent events (like near $100 oil), the adoption of state renewable portfolio standards and tighter emissions requirements will help to make solar a better investment for corporations and venture capitalists.

Research Links

Wikipedia
Solar America Initiative
National Renewable Energy Laboratory
NASA Solar Research
Million Solar Roofs