What the American Recovery Act Did for Clean Energy of 2009

American Recovery Act

President Barack Obama’s American Recovery and Reinvestment Act of 2009 (ARRA), the largest single investment in clean energy in history, has provided more than $90 billion in strategic clean energy investments and tax incentives to promote job creation and the deployment of low-carbon technologies, as well as leveraged approximately $150 billion in private and other non-federal capital for clean energy investments, according to a new report released by the White House Council of Economic Advisors (CEA).


The report says clean energy investments made up over one-eighth of total ARRA spending and provided a meaningful boost to economic output.

Specifically, CEA says, these investments transformed America’s clean energy economy by doing the following:

• The act supported roughly 900,000 job-years in clean energy fields from 2009 to 2015.

• Through loan guarantees to support more than $40 billion of investments, as well as tax credits, the act spurred a major expansion of renewable energy generation through more than 100,000 projects across the country. Since 2008, solar electricity generation has increased over 30 times and wind generation has increased over three times.

• ARRA funding supported a plunge in technology costs for many clean energy technologies. Since 2008, the cost of utility-scale solar PV installations has fallen nearly 60 percent. Battery costs for electric vehicles fell from almost $1,000/kWh in 2008 to under $300/kWh in 2014.

• The act provided the seed funding needed to start the U.S. Department of Energy’s (DOE) Advanced Research Projects Agency-Energy (ARPA-E) program. The program has invested in 475 transformative energy technologies, and its projects have secured $1.25 billion in private-sector follow-on funding.

• ARRA funding for the Smart Grid Investment Program helped to support the installation of 16 million smart meters.

• According to a new report that will be released next week, the amount of battery storage increased by 500 percent from 2012 to 2015. As more renewable energy comes online, CEA expects the amount needed for storage to accelerate substantially. External analysts have projected that storage installations in the U.S. over the next four years will total nearly 10 times what is currently deployed. These estimates could be even higher due to the extensions of the renewable energy tax credits.


According to the report, ARRA increased the country’s capacity to manufacture wind turbines, electric vehicles, batteries, and other clean energy components domestically. It authorized a 30 percent tax credit for investments in more than 180 advanced energy manufacturing projects and provided $2.3 billion for renewable energy generation, energy storage, advanced transmission, energy conservation, renewable fuel refining or blending plug-in vehicles, and carbon capture and storage.

In addition, the funding helped support a dramatic increase in the share of domestically produced wind turbine components used in the U.S. – from 25 percent in 2006-2007 to 72 percent in 2012, says CEA, which adds that ARRA made unprecedented investments in renewable generation and contributed to the largest growth in installation of wind turbines, solar panels and other renewable energy sources in U.S. history.

The Section 1603 Payments-In Lieu-Of-Tax-Credits program, which began with ARRA, provided nearly $25 billion in funding to support the installation of more than 104,000 wind, solar, geothermal and biomass projects that provided more than 33 GW of power – enough to power more than 8 million homes each year. Additionally, ARRA extended an existing $0.02/kWh (in 2008 dollars) production tax credit for wind, geothermal and hydroelectric generation and a $0.01/kWh production tax credit for biomass and landfill gas (which was extended for wind another five years last year).

NCSN-recovery-actARRA also provided a major infusion of funds to the DOE’s Loan Programs Office (LPO), which guaranteed $16.1 billion in loans to ARRA projects. These include one of the world’s largest wind farms, several of the world’s largest solar generation projects, and thermal energy storage systems, says CEA.

According to the report, the successes of the program have supported a host of new jobs and more than $40 billion in total investment, including as follows:

• NRG Solar and MidAmerican Renewable’s Agua Caliente photovoltaic solar slant: LPO provided a $967 million DOE loan guarantee in August 2011 to Agua Caliente for a 290 MW plant in Arizona – the first to use new inverter technologies that make the plant more reliable and allow operations during larger voltage variations than traditional inverters. When built, Agua Caliente was one of the largest utility-scale solar PV projects in the world.

• Brookfield Renewable’s Granite Reliable Wind Farm: LPO provided a $169 million partial loan guarantee to finance Granite Reliable, a 99 MW wind project in New Hampshire. The project was one of the first onshore wind projects to use a 3 MW turbine for its electrical generation technology – leading to cost reductions on a per-megawatt basis.

In addition, ARRA appropriated more than $10 billion to support projects to help modernize the electric grid, enhance the efficiency of the U.S. energy infrastructure, and ensure reliable electricity delivery – largely through smart grid projects and interconnection transmission planning.

CEA says the act’s investments were a down payment toward a sustainable, 21st-century clean economy and helped the country take a large step forward to reducing fossil fuel consumption and reducing carbon pollution.

Reprinted from Solar Industry Magazine

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