"Stop-Go" U.S. Clean Energy Policies Rattle Investors

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Stoel Rives attorney Graham Noyes discussed in CSP Today the impact of U.S. budget cuts and Congressional back-peddling on renewable energy commitments for concentrated solar thermal power developers ("CSP"). The US Department of Energy saved its two renewable energy loan guarantee programs in the recently approved federal budget, but billions of dollars have been cut from the coffer and nothing has been promised for the next fiscal year. The budget bill that President Barack Obama signed on April 15 did cut about US$17 billion overall this year from the less popular loan guarantee program, known as section 1703, which required developers to pay a "credit subsidy fee" as insurance against defaulting on a new loan. The more popular 1705 program, which includes funding that relieves companies from paying those fees out-of-pocket, was preserved.

"The good news is we did see some funding essentially injected into the right part of the program. The bad news is it was quite a bit less funding than what was in the program overall previously, and relatively modest compared to what's going on in China in particular, where they're pursuing much more aggressive solar and wind programs," said Noyes. "Uncertainty with (the loan guarantee program) is certainly having a negative effect on investor confidence, compared to if we had robust and consistent clean energy policy in the US," he added. "We don't have the kind of consistency in this country that investors would like to see, but there still is a lot of enthusiasm in the CSP sector, a lot of major projects going on."

"U.S. Policy: 'Stop-go' policies hamper renewable energy roll out" was published by CSP Today, May 6, 2011.

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