ARRA Energy Report Card: Two Years Later

Jan 1, 2011
212 Pages - Pub ID: SB2849576
Abstract Table of Contents Search Inside Report Related Reports

Introduction At $94.8 billion, clean energy investments account for the largest portion, 30 percent, of ARRA appropriations directed for innovative infrastructure improvements. This public spending in the form of direct funds and tax incentives were appropriated to encourage innovation and adoption of clean energy technologies, establishing a foundation for a national transition to a clean energy economy. ARRA energy-related funding not only presents potential near-term economic benefits, but also long-term economic and strategic investment and a transformative opportunity for the energy sector.

The greatest opportunities to reduce energy consumption and carbon emissions can be found in the transportation, power, and residential and commercial buildings sectors. To this end, ARRA clean energy provisions represent an array of investments in advances in clean transportation, renewable power generation, modernization of the electric transmission and distribution grid, carbon capture and sequestration, and building efficiency. These investments support the development, production, and/or deployment of a host of both new and existing technologies, industry training to install, operate, and maintain these technologies, and community outreach programs to facilitate market conditioning to accelerate adoption of new, energy efficient products and methods.

The Transportation Sector received the greatest stimulus boost in terms of sheer dollar allotment with more than $22 billion to promote the development, production, and purchase of energy efficient transportation solutions and technologies. ARRA funding of mass transit will be essential to reversing the years of infrastructure deterioration, the declining service reliability for transit riders, the increasing maintenance costs for transit operators, and the worrisome limitations on the ability to expand system capacity at a time of high demand. Meanwhile, ARRA investment in advanced vehicles and fuels has the potential to someday deliver affordable electric cars that can drive 300 miles on a single charge, powered by $10 of clean electricity instead of $50 of oil—a scenario that could emancipate the country from its reliance on imported oil.

The Power Sector received the second highest allotment of ARRA funding with almost $21 billion, lead by investments in the smart grid that approached $11 billion. Smart grid investment, can be regarded as the biggest stimulus winner in terms of latent impact because the favorable implementation of various other ARRA energy initiatives—increasing renewable electricity generation and enabling electric vehicles while simultaneously ensuring reliability of electric service—hinges on successful grid modernization. In addition, maximizing the efficiency of the smart grid is widely viewed as the incident that will usher in an era of energy independence for the U.S. ARRA has demonstrated substantial effects within the Power Sector. For example, growth in renewable energy has increased since 2009, despite recessionary conditions, due in large part to ARRA. This will enable the U.S. to make significant progress toward meeting a goal of doubling its renewable generation capacity by 2012. Without ARRA investments, it is likely that the pace of renewable energy project construction and manufacturing growth would have otherwise slowed dramatically due the sharp economic and financial downturn over this period.

Lastly, the more than $18 billion dedicated to the Building Sector will aid the anticipated—and substantial—increase in building renovation aimed at making structures more energy efficient to combat rising energy costs and adverse environmental impacts. Energy efficiency gains in residential and commercial buildings as a direct result of ARRA are expected to decrease overall energy consumption of these sectors by nearly 3% in 2015. The EIA estimates that the savings in energy expenditures from these efficiency gains will exceed $13 billion in 2020.

Finally, one key success factor for the ARRA has been its ability to leverage federal funding with co-investments from the private sector and state and local governments to complement its investments in a wide range of activities. ARRA direct investments and tax incentives of about $95 billion in clean energy programs requiring co-investments will support about $250 billion in total investments in clean energy markets.

Report Scope

  • ARRA Energy Report Card: Two Years Later examines the ARRA clean energy investments and their impact on the various clean energy markets within the power, transportation, and building sectors. The report presents the ARRA direct investments, segmented by sector and clean energy market, and provides details with regard to cross-sector energy-related ARRA investments and tax incentives. A summary of the clean energy markets within each sector likely to be impacted by ARRA energy investments is presented, along with obligations to date, and potential impact and estimated market size to 2015. Several examples of specific projects are also included.
  • ARRA direct investments made in the power, transportation, and buildings sectors are discussed in detail. The report includes specific program details, appropriations amounts, awardees, and intent. Further, the markets expected to benefit from ARRA provisions are highlighted by sector. Discussion of these markets includes products and technologies and estimated market size to 2015.
  • Identification and profiling of twenty private-sector companies that have received American Recovery and Reinvestment Act awards under clean energy programs discussed in the report. These companies represent some of the largest total ARRA clean energy awards made to private sector companies to date. Recipient awards in the categories of renewable generation, grid modernization, carbon capture and sequestration, transportation, and energy efficiency are represented. Key profile information, brief descriptions of company activities, and discussion of company ARRA clean energy award activities are provided.

Report Methodology

The information in ARRA Energy Report Card: Two Years Later is based on primary and secondary research. Primary research entailed interviews with firms involved in the manufacture, distribution and sales of various clean energy technologies, systems and products, analysts and consultants to the energy industry to obtain insight into the products, technologies and market factors shaping the industry. Secondary research entailed data gathering from relevant sources, including government resources including: National Renewable Energy Laboratory (NREL), United States Department of Energy (DOE), United States Energy Information Administration (EIA); international institutions including the International Energy Agency (IEA), industry resources, company literature, SEC filings, and corporate annual reports.

What You’ll Get in This Report

ARRA Energy Report Card: Two Years Later contains important insights and projections regarding the future of clean energy markets impacted by ARRA investments and pinpoints ways current and prospective players can benefit from ARRA funding and related growth in these markets. No other market research report provides both the comprehensive analysis and extensive data that ARRA Energy Report Card: Two Years Later offers. Subscribers will benefit from extensive data, presented in easy-to-read and practical charts, tables, and graphs.

How You’ll Benefit from This Report

If your company is already doing business related to clean energy solutions, or is engaged in activities pertaining to renewable energy generation, smart grid, clean coal/carbon sequestration, energy storage, electric vehicles, components, and infrastructure, biofuels, mass transit, or building energy efficiency, you will find this report invaluable. It provides a comprehensive package of information and insight not offered in any other single source. You will gain a thorough understanding of the ARRA investments and impact on clean energy markets, as well as the projected market size and trends for the clean energy markets mentioned above.

This report will help:

  • Marketing managers understand the forces shaping the market for commercial available clean energy technologies and identify market opportunities.
  • Research and development professionals stay on top of competitor initiatives and explore demand for clean energy technologies.
  • Business development executives understand the dynamics of the various clean energy markets discussed and identify possible partnerships.
  • Information and research center librarians provide market researchers, product managers, and other colleagues with the vital information they need to do their jobs more effectively.


Additional Information

Market Insights: A Selection From The Report


ARRA Residential and Commercial Buildings Energy Efficiency Investments

Many of the provisions of ARRA target energy efficiency associated with residential and commercial buildings. Federal funding is provided to assist states and local governments in implementing energy efficiency programs, weatherize public housing, improve energy efficiency and renewable energy use in federal and military buildings, encourage purchase of energy efficient appliances, and to support small business research, development, and deployment of clean energy technologies. In addition to such direct investment, ARRA includes provisions that expand and revise tax credits for energy-efficient products purchased and installed in residential and commercial buildings. SBI Energy has identified nearly $18 billion across 12 direct investment programs funded through ARRA to promote the purchase and development of energy efficient products and technologies.

Table 1-4
ARRA Clean Energy Programs, Residential and Commercial Buildings
(in $ B)...

Market for Solar Power

Solar power can be generally defined as radiation from the sun transformed into an energy source. Since the sun radiates both light and heat, two corresponding technologies have been developed to harness each form: solar electric or photovoltaic (PV) technology converts the sun’s light into electricity; solar thermal (ST) technology converts the sun’s heat into energy.

Technologies

The basic unit of all solar electric technology is the photovoltaic (PV) cell. PV cells generate electricity by exploiting the “photovoltaic effect” where, under certain conditions, electrons flow through semiconductor materials when exposed to sunlight. At the heart of the PV cell is the semiconductor base. Currently, silicon, in amorphous, mono-crystalline or polycrystalline form, is the preferred material used for this purpose because...

Market for Advanced Fuels

Biomass is organic matter that can be converted into liquid fuels or electricity. Primary biomass feedstocks are harvested or collected from the fields or forests where they are grown. Examples of primary biomass feedstocks include grains and oilseed crops used for transportation fuel production, and some residues from logging and forest operations that are...

High Speed Rail (HSR) Technologies

SBI Energy analyzed the business plans of several global HSR development initiatives to understand the critical motivators for investment in HSR as a transportation system. Common among all HSR initiatives is the reduction in dependence on expensive fuels required for more conventional transportation modes, such as air travel and highway travel. In the US, for example, the consumption of jet fuel has been consistently 7 percent of total energy consumption of all transportation modes since 2005. In 2009, SBI Energy estimates that 1,875 trillion BTUs of jet fuel were consumed for US-based air travel, compared to 1,873 trillion BTUs in 2005. The greatest share of energy consumption is from motor fuels for passenger cars and motorcycles; 36 percent for 2009. Class 1 Rails (defined as operators with more than $250 million in revenue) consume the least amount of diesel fuel energy. The efficient manner in which railroads transport people and freight is a primary driver for HSR investment in nations dependent upon intercity transportation.

Additional Materials


BLOG: Two Years Later, the Positive Influence of ARRA Investments Cannot Be Debated

Two years after the enactment of ARRA, indications are strong that the Recovery Act is aiding the U.S. in attaining its goal of doubling renewable generation capacity over the next two years.

Renewable energy has taken hold in the U.S. with installations of new wind turbines and solar panels occurring regularly.  The U.S. is making significant progress toward attaining its goal of doubling renewable generation capacity over the next two years, due in large part to support from the American Recovery and Reinvestment Act (ARRA) introduced in 2009.
ARRA investments are funding research projects to develop next generation renewable energy technologies, such as solar thin films and new wind turbine designs that will create a cost competitive alternative to electricity currently generated from coal or natural gas power plants while simultaneously creating long-term economic market growth. Consider the following examples:

  • Aided by ARRA investments, The Council of Economic Advisors (CEA) reports that domestic manufacturing capacity for solar photovoltaic (PV) modules is forecasted to grow from <1 GW per year in 2008 to nearly 4 GW per year in 2012.
  • ARRA investments are accelerating the rate of innovation in solar photovoltaics and according to the CEA, the new technology will drive down the costs of solar panels over the next five years; possibly by 50%.
  • U.S. wind power capacity grew 40% in 2009 over the prior year, despite weak economic and investment conditions. In July 2010, the CEA reported that ARRA was responsible for approximately 6 GW of wind capacity installation that might not otherwise have occurred in 2009. 
  • U.S. manufacturing capacity for components such as gearboxes, generators, and large casted steel parts, has lagged behind actual demand. The 48C Manufacturing Tax Credit program awarded $346 million in tax credits to 52 wind manufacturing projects to facilitate additional U.S. manufacturing capacity to ensure the U.S. is able to supply a growing domestic market through domestic production.
  • An April 2010 U.S. Geothermal Energy Association (GEA) survey indicated a 26% increase in new projects under development in 2009 and concludes that the stimulus funding played an important role in propelling geothermal growth amidst recessionary economic conditions.

Overall, the Energy Information Administration (EIA) estimates that U.S. renewable generation capacity will increase 32% more than without ARRA support - reaching 155 GW in 2015. Two years after the enactment of ARRA, indications are strong that the Recovery Act is aiding the U.S. in attaining its goal of doubling renewable generation capacity in the next two years.

In the News

American Recovery and Reinvestment Act Grows Renewable Energy Markets
and Drives Domestic Energy Independence

New York, January 31, 2011 — The U.S. is making significant progress toward attaining its goal of doubling renewable generation capacity over the next two years, due in large part to support from the American Recovery and Reinvestment Act (ARRA) introduced in 2009.

ARRA investments are funding research projects to develop next generation renewable energy technologies, such as solar thin films and new wind turbine designs that will create a cost competitive alternative to electricity currently generated from coal or natural gas power plants while simultaneously creating long-term economic market growth.

ARRA Report Card: Two Years Later, the latest industry study from market research publisher SBI Energy provides a time-capsule analysis of the impact of ARRA investments. The report features framework to the new energy economy:

  • Aided by ARRA investments, The Council of Economic Advisors (CEA) reports that domestic manufacturing capacity for solar photovoltaic (PV) modules is forecasted to grow from <1 GW per year in 2008 to nearly 4 GW per year in 2012.

  • ARRA investments are accelerating the rate of innovation in solar photovoltaics and according to the CEA, the new technology will drive down the costs of solar panels over the next five years; possibly by 50%.

  • U.S. wind power capacity grew 40% in 2009 over the prior year, despite weak economic and investment conditions. In July 2010, the CEA reported that ARRA was responsible for approximately 6 GW of wind capacity installation that might not otherwise have occurred in 2009.

  • U.S. manufacturing capacity for components such as gearboxes, generators, and large casted steel parts, has lagged behind actual demand. The 48C Manufacturing Tax Credit program awarded $346 million in tax credits to 52 wind manufacturing projects to facilitate additional U.S. manufacturing capacity to ensure the U.S. is able to supply a growing domestic market through domestic production.

  • An April 2010 U.S. Geothermal Energy Association (GEA) survey indicated a 26% increase in new projects under development in 2009 and concludes that the stimulus funding played an important role in propelling geothermal growth amidst recessionary economic conditions.

Overall, the Energy Information Administration (EIA) estimates that U.S. renewable generation capacity will increase 32% more than without ARRA support-reaching 155 GW in 2015. Two years after the enactment of ARRA, indications are strong that the Recovery Act is aiding the U.S. in attaining its goal of doubling renewable generation capacity in the next two years.

ARRA Energy Report Card: Two Years Later examines the ARRA clean energy investments and their impact on the various clean energy markets within the power, transportation, and building sectors. The report presents the ARRA direct investments, segmented by sector and clean energy market, and provides details with regard to cross-sector energy-related ARRA investments and tax incentives. A summary of the clean energy markets within each sector likely to be impacted by ARRA energy investments is presented, along with obligations to date, and potential impact and estimated market size to 2015.

ARRA direct investments made in the power, transportation, and buildings sectors are discussed in detail. The report includes specific program details, appropriations amounts, awardees, and intent. Further, the markets expected to benefit from ARRA provisions are highlighted by sector. Discussion of these markets includes products and technologies and estimated market size to 2015.

Identification and profiling of twenty private-sector companies that have received American Recovery and Reinvestment Act awards under clean energy programs are provided in the report. These companies represent some of the largest total ARRA clean energy awards made to private sector companies to date. Recipient awards in the categories of renewable generation, grid modernization, carbon capture and sequestration, transportation, and energy efficiency are represented. Key profile information, brief descriptions of company activities, and discussion of company ARRA clean energy award activities are provided.

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