Three federal loan guarantee programs that have helped advance hundreds of innovative energy projects in recent years are on the chopping block. This is a troubling development for those who believe the U.S. should be moving ever faster toward finding alternative energy sources, not creating barriers.
Bills introduced in July in the U.S. House of Representatives and Senate eliminated the U.S. Department of Energy (DOE) Title 17 Loan Guarantee Program (House bill H.R. 3266 and Senate bill S. 1609). Also, funding for the U.S. Department of Agriculture (USDA) Rural Business Service (RBS) and its Sections 9003 and 9007 loan guarantee programs will be wiped out if H.R. 3268 and S. 1603 pass as currently framed. The Title 17 and Section 9003 funding programs have long been regarded as critical to spurring new energy ideas into being since conventional bank loans are rarely granted to first-of-a-kind projects because of the risk they will fail or not operate properly the first time they are deployed.
The Section 9007 program provides support to rural communities, businesses and farmers to install renewable energy and energy efficiency systems to reduce energy costs.
The DOE Title 17 Loan Guarantee Program was created by Congress in 2005 to remove the obstacles in obtaining loans for the first commercial deployments of American energy project by establishing a $40 billion revolving loan fund. The bills would do away with the $22 million it costs annually to administer the Title 17 program and the Advanced Technology Vehicle Manufacturing (ATVM) program, which funded the development and launch of the Tesla S and Ford’s Eco-boost engines.
Even worse, there are more than $50 billion in capital projects under review that will create 300,000 jobs that would be stopped in their tracks if these bills become law.
As for the USDA programs: 17 projects are now in Phase 2 of review for Section 9003 loan guarantees that total $1.3 billion. The projects being reviewed originate in 11 states across the U.S.—from Florida to Hawaii and from Georgia to Oregon. Moreover, there are 781 grant applications for Section 9007 Renewable Energy for America Program (REAP) grants, totaling $53.2 million, and 823 applications for guaranteed loan applications totaling $11.6 million. The individuals and companies that have applied for a USDA grant or a loan represent most of the 50 states.
Any reduction or cessation in funding for these important loan guarantees or grants from DOE and USDA will almost certainly create a barrier sufficiently intractable that many good ideas will not be able to take flight in the foreseeable future. Moreover, many job-creating projects currently under review would be brought to a halt.
If you want to weigh in on this matter with your elected officials—and timing is urgent because Congress is moving toward passage of these bills—you can find the phone number of your senators or representatives at:
Although it might seem an outdated approach in these times of electronic communication, experts say it’s more impactful if you call rather than email or text, even if you’re routed to voicemail.