President Obama released his proposed “Budget of the United States Government, Fiscal Year 2014.” The budget proposal contains a significant increase in spending on clean energy, including additional support for solar, wind, geothermal, and water energy; an investment in transitioning consumers and businesses to increased energy efficient practices; and the reduction of support for conventional energy suppliers.
Clean Power Stimulus
The proposal includes a provision for $615 million to stimulate an increase in the use of clean power, which includes an end goal of decreasing cost for the end-user. The proposal also includes a plan to spend 29 percent more than current rates on solar and wind power in an effort to make them competitive with conventional sources of energy. The additional spending would be used to more efficiently integrate those systems into the grid. In addition, the budget provides an investment of $153 million in research and design intended to transition the current electric grid to a Smart Grid.
The proposal includes an investment of $575 million in vehicle technologies, $282 in the development of advanced biofuels, and $2 billion in mandatory funding for an Energy Security Trust to transition conventional cars and trucks off of oil. The proposal states an effort to make electric-powered cars as affordable as conventional cars within the next decade.
Energy Department Funding
In addition, the proposed budget calls for an increase of eight percent in funding for the Energy Department at a time when many other government agencies are set to experience spending cuts or minor increases.
Decreased Conventional Energy Support
To pay for the increased support to cleantech sectors, the president has proposed eliminating tax breaks and subsidies for the gas, oil, and coal industries, and to eliminate low-priority and low-performing programs. According to the proposed budget, the proposed changes would eliminate $4 billion in annual subsidies and costs that “undermine efforts to address the threat of climate change.”
The proposed budget signals Obama’s continued commitment to clean energy, despite significant Republican opposition.
Elizabeth Holden is a partner in the Real Estate Development Practice at Hodgson Russ LLP. You can reach her at email@example.com.