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US President Barack Obama signed on Tuesday legislation that will provide various states with US$26bn of emergency funding to pay thousands of public sector workers. The H.R. 17586 bill has been approved by House of Representatives, while an identical version was passed by the Senate on August 5. The spending will be offset by a number of measures including a US$1.5bn cut in funding for renewable energy loan guarantees.

This is not the first time that the renewable energy industry has had to shoulder some of the burden of programmes designed to stimulate the country’s flagging economy. US$2bn was borrowed from the US$6bn fund set up to support renewable energy loan guarantees back in 2009 to help pay for the “Cash for Clunkers” rebate programme. The money was not returned, despite assurances from both lawmakers and the White House.

The decision has been met with fierce opposition from the American Wind Energy Association, the Solar Energy Industries Association, the Geothermal Energy Association, the National Hydropower Association and the Biomass Power Association.

It also paints a somewhat worrying picture for the larger US economy. If large-scale investment in projects designed to improve the nation’s energy security are being curtailed to support regular expenditure at the state level, then the gap in the country’s finances can only be expected to widen going forward.

Industrial Fuel and Power News, 11 August 2010

See also: Robbing Renewable Energy to Pay Teachers