The solar industry might have recognized the dangers inherent in President Donald J. Trump’s new Department of Energy (DOE) budget when the first four bullet points talked solely about nuclear energy.
In fact, the first time renewable energy is mentioned is in bullet point five, and it’s paired with the word “elimination” – not exactly an encouraging sign from an administration that has pledged fealty to fossil fuels and spoken disparagingly of renewable-energy sources for more than a year.
It does not get better.
Trump’s proposed budget slashes DOE’s funding 5.6% to a proposed $28 billion (down from $29.7 billion in Fiscal Year (FY) 2017, which ends on September 30). While a 5.6% cut doesn’t seem particularly draconian, the numbers jumps to 17.9% once the discussion moves to renewable and other energy programs than nuclear security. The lower number is only possible because of an enormous new investment in the National Nuclear Security Administration (NNSA).
The proposed budget targets three areas where the federal government supports solar and other clean energy technologies:
- the Advanced Research Projects Agency-Energy (ARPA-E), nurtures innovative energy technologies that are too early in the development process to garner private-sector investment;
- the Title 17 Innovative Technology Loan Guarantee Program, which allows companies and projects to take technology risks without the danger of losing their entire investment; and
- the Office of Energy Efficiency and Renewable Energy (EERE), which funds research into clean-energy technologies.
Under the proposed plan, ARPA-E and the loan-guarantee program will be eliminated completely, while EERE will only be allowed to focus on “early-state applied energy research and development activities where the Federal role is stronger.” No further explanation is offered about what that phrase means, so it’s not at all clear what EERE will be allowed to do. But given the funding cuts, it’s safe to assume the answer will look more like “not much” than “spur solar development.”
Further, it appears from the budget draft that EERE will compete three other programs – the Office of Nuclear Energy, the Office of Electricity Deliver and Energy Reliability and the Fossil Energy Research and Development – for the same money. Given DOE Secretary Rick Perry’s closeness with the fossil-fuel industries and the president’s recent anti-renewable rhetoric, it’s hard to see it competing favorably with at least the final one.
However, renewable energy will not bear all of the cuts. The Title 17 loan guarantee program was open to “advanced nuclear” and “advanced fossil fuel” technologies as well as renewable energy, and had recently announced a conditional commitment to a petroleum coke to methanol facility in Louisiana.
In Fiscal Year (FY) 2017, which began Oct. 1, 2016, and will end on Sept. 30, the DOE’s budget stood at $29.7 billion. The cuts will, according to Trump’s “Skinny Budget” released yesterday, save U.S. taxpayers $2 billion.
(A “Skinny Budget” is essentially a laundry list of requested budget items that first-term administrations submit early in their terms. The full budget, replete with the devil’s details, will be released later this spring.)
If passed as proposed, the solar industry will not be affected immediately. As the fastest-growing energy industry in the United States, employing more than 200,000 workers, it has established itself strongly enough in the energy infrastructure that even these draconian cuts are likely to have little if any impact on solar markets over the short-to mid-term.
The fear, however, is that without the three bodies facing sharp cuts, future innovations in the solar and battery technologies, including increased efficiencies, less expensive materials, and advanced in grid integration of high levels of renewable energy – could be slowed.
The one portion of the Department of Energy’s budget that will increase – by 11.3% – is the NNSA, which will oversee the revitalization of the Yucca Mountain nuclear waste repository.