Policy Priorities to Stimulate the Economy and Cut Climate Pollution

Clean Energy Project Finance

Why it Matters

Supply chain and workforce disruptions could cause clean energy projects to miss deadlines for tax credits they are counting on. At the same time, tax equity is drying up, threatening the financing clean energy projects require. In March alone, an estimated 16,500 renewable energy workers lost their jobs in states across the country. We must invest in industries that can create thousands of good jobs and support a sustainable future.

Policy Recommendations

Convert Tax Credits to Direct Payments or Cash Grants for Clean Energy Projects: Congress should give clean energy companies the option of direct pay – taking the tax credit as a cash payment in the form of a refund to the taxpayer in that taxable year – for a minimum of 24 months or establish a grant program to provide effective financing for clean energy projects. All technologies that qualify for the PTC, ITC, and 45Q (credits for captured carbon, which is explained more below) should be eligible. This would ensure that clean energy projects continue to move forward even as tax equity dries up. Congress provided this relief for almost 2 years in the 2009 stimulus, providing a critical bridge for over 100,000 clean energy projects at the peak of the recession. 

Extend the 45Q Tax Credit to 2024 and Convert to Direct Payments: Allow 45Q to be converted into a direct pay incentive so companies can collect the value of the tax credit without having to rely on uncertain tax equity markets. Congress should grant a multi-year extension of 45Q beyond January 1, 2024, to prevent the cancellation of planned projects that will now be significantly delayed by COVID-19 market disruptions.  

Extend Deadline to Qualify for Tax Credits: Congress should extend the safe harbor deadline to qualify for tax credits from 2020 to the end of 2022. Under the existing production tax credit, utility-scale wind projects receive 1-2 cents per KWh, depending on the year in which they began construction, for the first 10 years of electricity generation. The projects have 4 years to begin producing electricity, so projects that started operating in 2016 have until 2020 to produce electricity in order to receive the tax credit. With current supply chain and workforce disruptions threatening to delay projects, it is crucial that we extend this deadline so that these projects can obtain the credit, which is foundational to the projects’ finances.

Delay the Phase Down of the Investment Tax Credit: Congress should delay the phase down of the investment tax credit (ITC) for at least an additional two years. Under the existing ITC, offshore wind, solar, and other qualifying technologies could receive a credit equal to up to 30% of total project costs. The value of the credit started decreasing at the end of 2019; today, the ITC is a 26% tax credit. These credits are allocated depending on when projects begin construction. By delaying the phase down of the ITC, we can ensure that projects receive the 26% tax credit despite COVID-19 disruptions.

Electrical Grid

Why it Matters

In order to address the challenges of climate change we need a 21st century grid that can rely solely on clean energy. This means making ambitious and consistent investments towards having a larger, smarter grid, and one that can withstand adverse impacts from climate change. We must modernize our electrical system through robust transmission planning and competitive grants for enhancing transmission capacity, reliability, flexibility and climate resiliency of the grid.

Policy Recommendations

Provide $5 Billion in Grants for Local Governments to Invest in High Voltage Transmission: Congress should provide up to $5 billion in annual grants over 10 years to state, local, and tribal governments for investing in high voltage transmission lines. High voltage transmission lines allow renewable energy to move across long distances, which will substantially cut carbon emissions while also saving consumers money. Federal policy should also facilitate interregional transmission through comprehensive transmission planning and appropriate use of federal authority (with the aim of eventually consolidating a national grid).

Establish a National Policy for a Robust National Transmission Grid: The Federal Energy Regulatory Commission, in partnership with DOE and national labs and in consultation with appropriate private sector stakeholders, should develop a reliable, efficient, and resilient transmission infrastructure plan. FERC should also be directed to improve interregional planning such that the benefits between multiple regions can be assessed and realized; and planning processes between regions that neighbor one another are synchronized.

Provide $500 Million Annually in Grants for Grid Modernization: Congress should provide at least an additional $500 million annually in grants managed by the DOE’s Grid Modernization Initiative for utilities, national labs, and other stakeholders with projects that showcase the economic benefits of grid modernization. These include storage, microgrids (including intermunicipal infrastructure microgrids), advanced metering infrastructure, energy data centers, and distribution-level investments like electric vehicle chargers. These technologies increase the flexibility of our grid and make it easier to integrate and ensure return on investments in clean technology.

Allocate Funding for a Grid Resiliency Program: For every $5 spent on grid expansion, Congress should allocate $1 in spending to a grid resiliency program with an advisory body to allocate resources to grid infrastructure most at risk from extreme weather events, as well as other potential risks like cyber-attacks. The advisory body should also attempt to target investments in underserved and marginalized communities. Studies show that every dollar spent ahead of time on measures to reduce risk to our grid and other at-risk infrastructure can save six dollars in future disaster costs.

Roads and Bridges

Why it Matters

Investing in fully tackling the road and bridge repair backlog could create as many as five million jobs. According to an analysis of states’ Recovery Act reports, repair work on roads and bridges generated 16 percent more jobs per dollar invested than new road and bridge construction. This is largely because repair projects are more labor intensive—for example, they don’t need to spend as much money on land or right-of-way acquisition—so more of the money can go towards hiring workers.

Policy Recommendations

Fully Fund the Repair Backlog: Congress should invest the full $550 billion over five years in order to eliminate our road and bridge repair maintenance backlog, make our transportation network safer, and put millions of Americans back to work. Our road maintenance backlog – projects that would lift roads currently in poor condition into a state of good repair—is now $376.4 billion. On top of that, the U.S. has approximately 47,000 structurally deficient bridges, and it could cost nearly $171 billion to make needed repairs for all 235,000 bridges in the U.S.

Fix the Backlog Before Building New Roads: Stimulus funding for infrastructure should be limited only to repair projects so that states can tackle their maintenance backlog before using the funds to build something new. This idea has gotten some attention on Capitol Hill: House Democrats included a “Fix it First” policy in their January 2020 infrastructure framework, saying they would “revamp” the federal highway formula programs to prioritize maintaining and improving existing infrastructure.

Congress should also require that any state that wants to use federal funds for network expansion must prove it can afford to maintain the new roadway capacity. Over the past 10 years, states have spent about an equal portion of the transportation infrastructure dollars on road repair and new road construction—all while the percentage of roads in poor condition increased from 14 percent to 20 percent. This is unsustainable in the long-run, and adding new lane-miles when it isn’t absolutely necessary will only make the problem worse. Requiring states to demonstrate they can maintain new infrastructure and not let it fall into disrepair will ensure more federal funding goes toward repair projects that spend money faster, create more jobs, and avoid emissions increases.

Fund State Departments of Transportation: To maximize our investment, we need to make sure state DOTs are equipped to handle such a large influx of new funding and get projects started quickly. Congress should provide grant funding for state DOTs that face capacity issues and should also provide funding to FHWA to provide technical assistance to state DOTs on project selection and delivery. 

Fund State Assessments of U.S. Road and Bridge Resilience: The federal government needs to lead a comprehensive effort to assess the current condition of our transportation infrastructure from a resiliency standpoint, determining which projects are most critical and how much funding is needed. To do this, Congress should establish a resiliency-specific funding stream of at least $5 billion, as included in the Senate Environment & Public Works Committee’s highway reauthorization bill. This program should be competitive so that state and local agencies must detail how the project would improve resiliency based on well-defined criteria.

Create Definitive Resiliency Standards: Direct USDOT to develop definitive resiliency criteria and use those criteria in federal funding decisions, not only in the aforementioned competitive grant program but also in the highway formula programs and other competitive grant programs like BUILD and INFRA. The House Democrats’ Moving Forward Framework called for including resiliency as a decision-making factor in project selection. This will help ensure that all transportation infrastructure funding considers resiliency and that we’re rebuilding our infrastructure to last.

Reestablish Flood Protection Standards for Infrastructure: Reestablish federal flood protection standards and apply them to all infrastructure spending so that we can fully account for the future impacts of climate change and severe weather. This will ensure we’re spending taxpayer dollars wisely by directing funding away from locations that are most vulnerable like floodplains.

Implementing Dig Once Requirements: Include a “Dig Once” policy requiring broadband conduit to be included during the construction or reconstruction of any road receiving federal funding, if the surrounding communities do not already have broadband access. Direct state and local agencies to collaborate with the Internet Service Providers in their communities to identify where this conduit is needed and work together to minimize redundant digs. A “Dig Once” policy minimizing excavations could save $100 billion.

Electric Vehicles

Why it Matters

All new vehicle sales must be zero-emission vehicles by around 2035, if we want a chance of reaching net-zero by 2050. In 2019, almost 320,000 electric vehicles were sold in the U.S., accounting for only 2.0% of new sales. Other countries are moving quickly to support their automotive companies and to incentivize EV purchases. They want to grow their employment base in the auto sector and out-compete U.S. companies. If we do not grow our home market, we will lose competitiveness and shrink the over 4 million jobs in the auto sector, not to mention the additional 3 million jobs that are created from a viable industry – spending of the workers in the auto sector helps to grow retail and other small businesses in communities across the country. Becoming a tech leader in EVs means that we will be on the cutting edge of more innovations to grow new industries. The battery technology will have many new applications, including storage of renewables on the grid, and we want our U.S. companies to be a leader in these technologies of the future.

Policy Recommendations 

Extend the EV Tax Credit and Make it Point of Sale: The existing $7,500 tax credit for purchase of a new electric vehicle is available to any U.S. customer as long as the seller (e.g., Ford, GM, Tesla) has not already sold 200,000 units that qualify for this credit. This tax credit is available “after the fact,” i.e., at the conclusion of the taxable year in which the customer purchased the vehicle. Congress should extend the existing EV tax credit of $7,500 for 5 years and eliminate the 200,00o unit cap. This should also be made a point of sale credit. The “point of sale” rebate would be administered by the dealer, and the amount of the credit would be deducted from the new EV sale price, instead of when the customer files the tax returns. This likely will enhance the value of the credit to a customer since they do not have to wait until the following year to benefit from this incentive. Such a rebate could be available for the purchase of a used EV so that it is open to lower and middle income buyers. In addition, the amount of the rebate could be larger for lower and middle income buyers so that it is a more progressive incentive structure.

Establish a Rebate Program to Trade in Gasoline-Powered Vehicles: These rebates can also be designed to trade in a gasoline-powered vehicle to be “scrapped” (eliminated from the vehicle stock – destroyed with materials recycled). In doing so, this will take a lower fuel economy vehicle off the road and accelerate decarbonization. Rebates on scrappage programs have high CO2 abatement costs, but do achieve an important and desired environmental outcome.

Support and Enhance the Department of Energy Low Cost Loan Program: The Advanced Technology Vehicle Manufacturing program in the Loan Program Office at DOE offers critical capital to companies. This is a successful program which could provide assistance as automotive companies retool plants to make EVs. Lordstown Motor recently applied for a $200 million loan to produce an electric pickup truck in the former GM plant in Ohio. This program has languished in recent years and is not moving on this application. The House Infrastructure bill includes the 48C tax credit which would provide up to 30% of capital costs over 5 years for clean energy technologies like EVs and batteries. It can also be used to build new battery plants. This type of policy support is an efficient way to assist companies in their investment in these new technologies and allow them to be competitive leaders.

Fund EV Charging Infrastructure: Congress should establish a separate funding stream of at least $2.3 billion through 2025 and roughly $5 billion through 2030, including direct federal investment and grants to state and localities, to deploy the needed infrastructure. The House and Senate committees of jurisdiction have both called for such a program. This investment will help build out the infrastructure we need to rapidly transition to ZEVs, while creating thousands of manufacturing and construction jobs in the near-term. It will also provide a strong signal to consumers and automakers that the infrastructure to support ZEVs will be there as more are put on the road. According to the Center for American Progress, we need to deploy 350,000 additional public EV chargers by the end of 2025 and 600,000 by 2030 in order to accommodate the growth in EVs needed to meet our Paris Agreement commitments. While fulfilling our Paris Agreement emissions reduction targets is not enough, it will put us on a starting path towards achieving net-zero emissions by 2050. This buildout will cost us $4.7 billion over the next five years; taking existing state resources and the Volkswagen “Electrify America” settlement funds into account, that leaves us with a $2.3 billion gap.

Provide a Refundable Tax Credit for Homeowners and Businesses to Install Chargers: Congress should make the alternative fuel refueling property credit (30C) permanent to provide businesses and homeowners with certainty that they’ll be able to claim the credit when they install chargers in the future. Congress should also make the credit refundable for at least two years in order to better incentivize charger installation during the economic downturn and should change the credit cap to a per-charger basis, not per-charging station.

Mass Transit

Why it Matters

These actions would put Americans back to work; make it safer for people who rely on transit, particularly essential workers and communities of color across urban, suburban, and rural communities, to get to their jobs; and better protect transit workers. Investing in transit would also reduce congestion and air and carbon pollution significantly.  

Policy Recommendations 

Personal Protection Equipment for Transit Workers: Congress should order the federal government to coordinate PPE purchases with transit agencies across the country in order to supply transit workers with necessary PPE so they can continue working while staying healthy. We also require more comprehensive guidance from CDC on how to safely equip transit workers and work environments.

Fund Continuing Operations: Congress should fund $32 billion through the end of fiscal year 2021 to maintain service levels and avoid furloughing workers, ensuring any additional funding is available to agencies in both urban and non-urbanized areas and awarded based on need.

Fully Fund the Maintenance Backlog: Congress should fully fund the $99 billion backlog of transit maintenance projects. In order to maximize job creation, Congress should provide enough funding for transit maintenance to fully tackle the backlog. This would create or save nearly five million jobs and generate tens of billions of dollars in economic returns over the next decade. Public transportation investments created 31% more jobs per dollar than new construction of roads and bridges. Every $1 billion invested in public transit creates more than 50,000 jobs, as well as economic returns of $3.7 billion over 20 years.

Increase Capital Investment Grants: Congress has only authorized $2.6 billion per year for the Capital Investment Grant (CIG) Program. Congress should provide an additional $4.95 billion for a total of $7.55 billion.

Use Existing Loan Authority to Build Near Transit: Congress has authorized $35 billion in loan authority for the Railroad Rehabilitation and Investment Financing (RRIF) program, but railroads have left $28 billion of that on the table. The FAST Act temporarily allowed TOD projects near passenger rail stations to apply for RRIF financing, but this provision expired in December 2019. Congress should extend this provision permanently and go further by expanding eligibility to include TOD projects near rail transit and bus rapid transit stations as well.

Increase Funding for Low- and No-Emission Bus Programs: Congress should add $520 million to the Low- and No-Emission Bus program in order to double the number of electric buses on the road along with accompanying charging infrastructure. 

Eliminate Cost-share Burden for Cities and States: Congress should provide a 100% federal cost-share for transit projects in any upcoming stimulus package. This will help alleviate the financial burden on cities and states that are struggling with reduced income and sales tax revenue, ensuring these projects can move into construction and create jobs as quickly as possible.

Make Transit More Resilient: Congress should direct FTA to develop resiliency criteria and best practices for heavy-rail and light-rail systems, bus depots, and other critical public transportation infrastructure; ensure that transit agencies seeking federal funding are including resiliency measures where needed in their plans; and provide technical assistance to help agencies incorporate resilience into their transit asset management plans.

Increase Congressional Oversight: Congress should require FTA and the Government Accountability Office to provide regular reports on project status, the cause of any delays, and how these delays increase the cost of transit projects to local communities. Congress should also set deadlines for FTA to sign a grant agreement after announcing an allocation.

Ports and Waterways

Why it Matters

Sea port infrastructure projects create more jobs than almost any other kind of infrastructure project. Investments in our ports and waterways will create jobs and encourage mode shift away from fossil fuel-intensive trucking by making it faster and easier to ship products by barge. Additionally, investments in flood control infrastructure will help make communities more resilient to climate change and extreme weather.

Policy Recommendations

Increase Funding for the Army Corps of Engineers Civil Works Program: Congress should increase funding for the Corps across the board, but particularly prioritize the Construction account so more projects that have gone through Investigation can begin construction in short order. This will help fix the $98 billion backlog in Corps projects, from lock and dam modernization to flood control, caused by limited funding for Civil Works. 

Raise the Federal Cost Share for Inland Water Way Projects: Congress should increase the cost share for inland waterways projects to 75%, the same as deep sea port projects. This will help get these projects into construction faster, creating jobs and improving barge transportation for our nation’s freight. 

Unlock the Harbor Maintenance Trust Fund: Congress should allow the Army Corps of Engineers to spend down the Harbor Maintenance Trust Fund (HMTF). The Trust Fund has built up a $10 billion surplus due to low Congressional authorizations. While Stimulus 3 will allow the Corps to spend as much as the HMTF took in the previous year, it doesn’t address the $10 billion balance. Unlocking the HMTF will make more funding available for harbor dredging and other port projects.

Manufacturing

Why it Matters

Every direct job in manufacturing creates more than four additional jobs, and every dollar spent in the sector adds another $2.74 to the economy. Grants, credits, and procurement requirements benefiting U.S. manufacturers will speed the development of clean energy technologies and materials, save energy, and support innovative businesses at home.

Policy Recommendations

Increase Funding for the Advanced Technology Vehicles Manufacturing Loan Program: Congress should increase the funding for the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program and make medium and heavy-duty truck manufacturers eligible for the loans. The ATVM program offers technology transition loans for retooling existing automobile and powertrain assembly lines. Increasing and expanding the program is critical to making the U.S. the largest domestic manufacturer of electric vehicles (including trucks) and EV components (innovative materials, batteries, and electric propulsion technologies) which are often made in other countries.

Renew Tax Incentives for Investments in Clean Energy Manufacturing Facilities: Restoring the 48C investment tax credit would incentivize businesses to create or expand manufacturing facilities developing a range of clean energy technologies. The $2.3 billion offered for this competitive credit under the 2009 stimulus was oversubscribed by more than 3 to 1 and was projected to generate almost 60,000 jobs. These credits incentivize manufacturing that supports a wide variety of clean energy technologies, from wind and solar to nuclear and electric vehicles. At least $3 billion should be offered in new 48C credits in each of the next 5 tax years. Given the challenges expected in tax equity markets during economic recovery, credits allotted in the first two years should be refundable.

Develop a Revolving Loan Fund to Support Manufacturers: The federal government should provide industrial loans for manufacturers to encourage the production of clean energy technologies or innovations that reduce emissions. The loans would be targeted to applicants who demonstrate that their projects will result in good-paying, domestic jobs.

Reinstate Matched Funds for Industrial Efficiency Projects: The Energy Department, through what is now the Advanced Manufacturing Office, has supported energy efficiency improvements for manufacturers through matched grants. For example, the ArcelorMittal Indiana Harbor complex, North America’s largest steelmaking plant, received a $31.6 million matching grant under the 2009 stimulus to develop a 38-megawatt combined heat and power system to turn wasted gas into electricity.

Provide Federal Contracts to the Best Actors in Manufacturing: Recovery-targeted federal infrastructure procurements should follow “Buy Clean, Buy America” principles, prioritizing purchases from domestic manufacturers with strong labor standards and smaller carbon footprints.

Carbon Capture

Why it Matters 

Amidst the din of crashing oil prices and rising unemployment, new carbon capture, use, and storage (CCUS) projects whisper hope in fossil energy-producing states. While few in number, the CCUS facilities under development right now represent an opportunity for oil-producing regions to play to their strengths, pivot away from their reliance on volatile petroleum markets, develop a more sustainable and diversified economy, and advance climate technologies with national and global significance.

Policy Recommendations

Build CO2 Pipelines: Support the creation of large interstate trunk pipelines to transport CO2 from multiple capture projects at industrial facilities and power plants to utilization and geologic storage sites. These infrastructure projects will create thousands of jobs in multiple regions of the country. This should be paired with the development of underground CO2 sequestration sites across the nation by fully funding the CarbonSAFE program to expedite carbon storage projects in multiple regions of the country.

• Provide $500 million in low- and zero-interest loans to build large-volume, long-distance interstate CO2 trunk pipelines. As the federal highway system did for state and local roads, this “superhighway” would encourage construction of shorter, cheaper pipelines to move CO2 from multiple industrial facilities and power plants to geologic storage sites. The companies building the pipelines would repay their loans by charging fees for every ton of CO2 Federal support should be offered in regions of the country where this infrastructure does not exist.
• Designate CO2 pipelines as pollution control devices. This federal designation would exempt pipelines from ad valorem and property taxes in certain states, further incentivizing private investment.
• Unlock natural infrastructure for CO2 storage sites. The U.S. has enormous permanent underground CO2 storage capacity in different regions of the country. The DOE’s CarbonSAFE Program is currently investigating storage in 13 states. Congress should appropriate $540 million to prepare multiple CarbonSAFE projects for commercial use. In addition, $50 million should be allocated to ensure that the EPA has the staff capabilities to expedite underground carbon storage permitting.

Expand CCUS Cost Share: Temporarily expand DOE cost-share program for commercial demonstrations of industrial CCUS and DAC projects. The government has funded CCUS demonstration projects for coal and ethanol, but not for heavy industrial projects such as cement and steel, nor have they funded DAC commercial demonstrations. These projects are necessary to expand the national CCUS industry.

Pipelines

Why it Matters

Several government agencies and NGOs have identified significant methane leakages in distribution pipelines. Leaks are most likely to occur in old pipelines made of cast iron and unprotected steel. In some cases methane leakages may be so drastic that they negate the emissions gains of replacing coal power plants with natural gas power plants.  

Policy Recommendations

Evaluate and Promote New Methane Leakage Technologies: Several new technologies that can accurately and efficiently detect methane leakages across natural gas supply chains are nearly ready for implementation. DOE should evaluate top innovators in the field and support pilot programs for improved methane leakage monitoring technology, including partnerships with industry, labs, and incubators.

Require More Frequent Leakage and Repair Inspection: Congress should increase the required frequency of leakage and repair inspections for company-owned oil and gas facilities. Increasing the frequency to a quarterly rather than bi-annual basis would align federal scrutiny of methane leakages with states like California, Colorado and Wyoming, which already implement quarterly inspections for some oil and gas operations and have lower leakage rates than other oil & gas producing states, like Texas.

Create a pipeline replacement program: The federal government could provide capital to start a revolving loan program that enables owners of natural gas distribution infrastructure to repair methane leaks. In addition to financing, grants could be provided to particularly vulnerable and under-resourced communities, as well as to incentivize installation of pipelines that can accommodate higher blends of hydrogen, which can help reduce the carbon footprint of the fuel system. According to a study by Stanford University, cities with successful pipeline replacement programs have 90% fewer leaks per mile than cities without such programs.

Broadband

Why it Matters

At a time when more and more Americans rely on an Internet connection for telehealth and virtual learning, too many communities are getting left behind without access to broadband. A lack of connectivity is disproportionately affecting rural African American and Native American communities. Building out our broadband infrastructure will help get more Americans online and plugged into the modern economy, while creating construction jobs.

Policy Recommendations

Establish a National “Quick Build” Promise: Congress should use time-limited “shot clocks” to tear down barriers to construction for essential clean energy projects that currently exist at all levels of government, such as lengthy approval processes and utility pole access issues. Federal agencies should be required to publish fees on their websites with explanations for how those fees were calculated - and those fees should be used to hire the staff needed to cut down on application review times. The federal government should also encourage states and local governments to do the same.

Make $45 Billion Available through A Reverse Auction: Congress should make $45 billion in federal funding available through a reverse auction to support broadband projects in hard-to-serve areas. The auction can be run through the Federal Communications Commission’s established process and should not discriminate between different providers or technologies – everyone and everything that could potentially serve communities lacking broadband should be able to participate. And to get the most out of these federal dollars, they should be awarded to broadband providers that will connect the most unserved homes for the lowest subsidy.

Automatic Enrollment for Low-Income Households: Congress should ensure broadband affordability by enabling automatic enrollment for low-income households eligible for the FCC’s Lifeline program. Changing the system so that these households receive an automatic notification on their eligibility would help ensure newly-connected communities can afford the Internet services made available to them. All low-income households eligible for Lifeline should also receive a voucher for a low-cost computer to finally end the digital divide.

Implement a “Dig Once” Policy: Congress should implement a “Dig Once” policy to increase access to broadband while reducing costs. Broadband conduit should be included during the construction or reconstruction of any road receiving federal funding if it isn’t already available. This will help reduce overall costs by limiting the number of times a road has to be dug up while making it easier for communities to access broadband. State and local transportation agencies should be encouraged to collaborate with the Internet Service Providers in their communities to minimize redundant digs.

Building Efficiency

Why it Matters

Buildings currently account for 39 percent of U.S. GHG emissions. Expanding energy efficiency programs and increasing funding for weatherization and retrofit incentives for buildings will help reduce emissions and bring down costs for customers. Efficiency providers have been hard hit by the pandemic due to the inability to work inside a home. Reducing energy demand is low hanging fruit both for climate and energy consumers.

Policy Recommendations

Provide $5 Billion to the Department of Energy Weatherization Assistance Program: Low income households carry a larger burden for energy costs, typically spending 16% of their total income as compared to 3.5% for other households. Weatherization supports job creation and reduces energy bills for the most vulnerable populations.

Improve the Statutory Authority of the Weatherization Assistance Program: Congress should improve the statutory authority of the Weatherization Assistance Program to promote flexibility, including increasing the average cost per unit, increasing allowable administrative costs, changing the date to begin reviewing previously weatherized lists, and doubling the cost cap for solar to incentivize solar training and building organization capacity for future solar installs while production is shut down.

Expand use of Energy Saving Performance Contracts: Congress should expand the use of Energy Saving Performance Contracts (ESPC) by the federal government and by state and local municipalities. ESPC programs are an effective way to reduce energy use in federal buildings while improving efficiency and resiliency with energy savings leveraged to pay for the cost of the retrofit.

Provide $500 Million in Grants to Contractor Businesses: Congress should provide $500 million in grants to contractor businesses to help companies pay their contractors to undertake online training. “Home On-line Performance-based Energy-efficiency” (HOPE) provides stipend for contractors who complete the HOPE training to advance their careers and help homeowners save energy through home retrofits once contractors are allowed back in homes and buildings.

Provide $6 Billion for Residential Retrofits: Congress should provide $6 billion for incentives to retrofit residential buildings. Incentives for homeowners to invest in energy efficiency improvements through a multi-part rebate program to support states with a diversity of building stock, energy efficiency program expertise, and contractor workforce skills and help these states to advance the efficiency, health and safety of their homes.

Clean Water Infrastructure

Why it Matters

We must ensure that every American has access to clean water and that our water systems operate as efficiently as possible. The public health crisis and need for frequent hand-washing has illuminated disparities in access to clean water, and this disproportionately affects minority and low-income communities. Our water delivery systems are aging, and the crumbling infrastructure is allowing pollutants to seep into local water supplies. We need to super-charge our investment in clean water systems to ensure everyone has access.

Policy Recommendations

Boost Federal Assistance for State and Local Water Infrastructure: Congress should provide $40 billion over the next five years to capitalize Clean Water State Revolving Funds (SRFs) to help state and local governments make critical infrastructure repairs and ensure everyone has access to clean water. EPA estimates that $271 billion will be needed for wastewater infrastructure over the next 25 years.

Require Water- and Energy-Efficiency Technologies to Reduce Waste: Congress should improve our systems’ energy- and water-efficiency by requiring utilities to implement, where feasible, water- and energy-efficiency technologies to reduce waste. This should include projects that recapture and reuse energy produced from wastewater treatment such as methane recapture.

Require 15% of State Revolving Funds to Be Used For Green Infrastructure: In future stimulus packages, Congress should require states to utilize at least 15 percent of their SRF grants on water- or energy-efficiency projects or nature-based approaches to addressing water quality challenges. This policy has precedent in the Recovery Act, which required states’ Clean Water SRFs to use a portion of their federal funding for green infrastructure and environmentally innovative projects.

Clean Energy Startups

Why it Matters

The economic crisis caused by the COVID-19 pandemic has placed nearly all small businesses in a dire position, and clean technology startups are no exception. Congress must ensure that an entire generation of early-stage innovative companies doesn’t die on the vine as part of its broader emergency measures to stabilize the economy and prevent further job loss. Additionally, the Department of Energy and other federal agencies have a wide range of programs with a proven track record of supporting talented energy technology entrepreneurs who create jobs. As the economy starts to reopen, Congress must ensure that these programs have the necessary authorizations and appropriations to rebuild an even larger and more dynamic clean technology startup ecosystem across the United States.

Policy Recommendations

Temporarily waive cost-share requirements: Department of Energy research programs typically require awardees to secure a 20-50% cost-share from non-federal sources. Meeting this requirement can be difficult for startups even in a strong economy, and should be waived for the duration of the current recession to ensure worthy projects are not stalled. 

Eliminate government payment delays: Even when a small business successfully wins a federal agency contract or grant, they typically face a delay of 45–90 days before receiving the funds, awaiting final negotiations and payment processing. Congress should authorize the Treasury Department to make zero-interest advance loans to startups at the moment they receive a federal agency award notification.

Fix PPP's ability to reach startups: The Small Business Administration’s Payment Protection Program (PPP) should continue to process and accept loans, and receive increased funding in further rescue and recovery bills as needed. The program should allow for more flexibility and access for small businesses. All small businesses that certify they need help in this crisis, including startups that are part of another firm’s investment portfolio, should qualify for relief through this program and even eligible for additional loans.

No-cost extension and cash grants to keep existing government awardees afloat: Congress should provide no-cost extensions and supplemental funding to federal agencies, allowing them to send emergency payroll-protection payments to any existing contractor or grantee that cannot meet its performance obligations due to disruptions caused by the COVID-19 pandemic (e.g. shelter-in-place orders, restricted access to lab facilities, etc.). These direct cash payments would be more rapid and reliable than the Paycheck Protection Program (PPP), which relies on private-sector banks as intermediaries.

Expand the SBIR Program to extend a lifeline to promising yet at-risk companies: Eleven federal agencies have long standing Small Business Innovation Research (SBIR) programs that together provide over $3 billion per year to support innovative technology startups and small businesses. While many clean energy startups are struggling to make ends meet, Congress should provide supplemental funding of at least $300 million (allocated among these agencies) to immediately make awards of $100,000 to former high-quality SBIR applicants that were not selected simply due to prior funding limitations. 

Expand Manufacturing USA program to bolster US manufacturing: Manufacturing USA institutes partner federal, industry, and academic parties to strengthen and advance the US manufacturing sector.  Amid project delays and cancellations paired with job losses and furloughs, Congress should leverage the program to get this sector back on its feet. This includes extending the authorization for Manufacturing USA to at least 5 years; increasing funding to $250 million annually; and allocating 20-30% of funding to create and sustain workforce programs such as educational curricula development, training, and apprenticeships. The institutes should also be directed to develop greater capabilities in demonstration, scaling, and commercialization activities. Lastly, cost-share requirements should be temporarily waived. 

Expand clean energy entrepreneurship training and resources:  Congress should ensure that every DOE technology office has a portfolio of programs that accelerates the commercial success of clean energy startups. We recommend the revitalization or expansion of the following programs: 

• The Sunshot Incubator initiative jump-started 100 companies that went on to raise 22x more funding from private-sector investors than they did from the agency. It should be renewed at $100 million annually and expanded to all clean energy technologies with a new program title.
• American-Made Challenges accelerates innovation by moving clean energy entrepreneurs through a rapid tournament from initial idea all the way through to a U.S.-based manufacturing partnership. $10 million in incubator funds should be used for this program and all clean energy technologies should be eligible to participate.
• Lab-Embedded Entrepreneurship Programs, such as Berkeley’s Cyclotron Road, allow first-time entrepreneurs with deep scientific expertise to access extraordinarily high-value equipment, expertise, and training over the course of two years in residence at the DOE Labs. $50 million per year could allow a new national cohort of fellows, at an expanded number of DOE laboratories and universities.
• Energy I-Corps is an entrepreneurial boot camp for career researchers at the DOE National Laboratories. Program funding should increase to $30 million annually (comparable to the National Science Foundation’s (NSF) I-Corps program) and expand to include DOE-funded teams at universities and small businesses. 
• Small Business Vouchers incentivize both small startups and large national labs to collaborate on commercially promising research. Through this program, clean energy startups vastly benefit from the public funding and technical expertise. Program funding should increase to at least $30 million and extended across all DOE national laboratories. 

Incentivize investment in clean energy innovation through the Small Business Investment Company (SBIC) program: SBICs are privately managed investment funds backed by a loan guarantee from the US Small Business Administration (SBA). Today there are about 300 SBIC funds investing some $30 billion in small businesses, which tend to be relatively mature companies with low technology risk. The Senate Small Business Committee, as part of its proposed bipartisan SBA Reauthorization and Improvement Act, has proposed to restructure the program and catalyze a new generation of “Innovation SBICs” that would promote U.S. advanced manufacturing and the financing of innovative technology companies, including clean energy startups.

Optimize the DOE SBIR Program to give a wider array of startups access to its resources: Through the SBIR program, the DOE already awards over $300 million to about 400 startups annually, which would rise automatically with increased DOE R&D budgets. While successful by many measures, the program currently relies on program managers scattered throughout the DOE, for whom SBIR is often their lowest priority. DOE’s SBIR program is larger than many of the Department’s applied technology program offices. It should be managed under one roof to operate with similar urgency and independence, especially given the increased needs of small businesses during an economic recovery. It should also follow the successful model used by the National Science Foundation, which prioritizes support for a greater number of small businesses instead of grants to previous awardees.

Fund a new generation of energy scientists and engineers through RE-ENERGYSE: The Regaining our Energy Science and Engineering Edge RE-ENERGYSE) plan, once authorized but never funded, would educate thousands of clean energy scientists and engineers through programs at universities, community and technical colleges, and K-12 schools, including targeted support for Minority-Serving Institutions. To meet the needs of the current economic crisis, the program should be established and the initial proposal of $74 million should be increased to at least $100 million, divided between the Department of Energy and National Science Foundation.

Clean Energy Demonstrations

Why it Matters

Clean energy demonstrations create a variety of jobs and economic activity in the near-term, while unlocking long-term benefits like new market opportunities and innovative technologies to help fight climate change. The U.S. is renowned for its world-class energy technology research, but the federal dollars often stop during later stages like demonstration, creating what’s sometimes called the “second valley of death.” This halts progress, puts entrepreneurs at risk, and leaves critical carbon-cutting technologies collecting dust. Federal funding for demonstrations can bridge this gap, create immediate economic activity through a number of major projects, and allow U.S. businesses and workers to lead the way in lucrative new industries.

Policy Recommendations

Congress should fund a variety of clean energy demonstrations through the Department of Energy. While DOE normally requires demonstration project developers to obtain 50% of the project cost from a non-federal source, this cost-share should be reduced or suspended temporarily to account for challenges in securing private sector investment during a recession.

Advanced Nuclear Reactor Demonstrations: Congress provided $230 million in FY2020 to initiate a Department of Energy program aimed at demonstrating a minimum of two advanced nuclear reactors as soon as 2025. Teams of reactor developers, manufacturers, utilities, and others are already forming to apply for funding. In addition to these demonstrations, the program provides Risk Reduction for Future Demonstration awards for 2-5 unique advanced reactor designs that could be commercialized by 2030, making sure the innovation pipeline stays full and the United States can take advantage of a wider range of technologies. Congress should commit at least the same level of investment in the program each year through 2025 to enable recipients to expand their operations. At least that same level of investment should be made in the program each year to enable recipients to immediately expand their operations and quickly commercialize technologies that will advance America’s climate, economic development, and national security goals. Committees in both the Senate and House have cleared legislation authorizing these demonstrations with bipartisan support.

Enhanced Geothermal Demonstrations: Conventional geothermal energy could be an important source of readily-available, carbon-free power, but only a small portion of the country has the right geological conditions to take advantage of it. Enhanced geothermal systems (EGS) use different techniques that could allow for geothermal energy generation in a much larger area of the country. Congress should direct DOE to complete four EGS demonstrations by 2025 and put the U.S. closer to unlocking massive new energy resources. With a number of similarities in drilling techniques, an expansion of EGS projects would also create opportunities for workers in the volatile oil and gas production industry to transition to a promising new clean energy sector. Committees in both the House and Senate have passed bills with bipartisan support to establish EGS demonstrations.

Energy Storage Demonstrations: Federal research has been critical to bringing down the price of lithium-ion batteries--currently the most ubiquitous battery technology. To fulfill the promise of renewables to affordably make up a major share of our power, additional innovation in energy storage is needed. Congress should invest $1 billion to support energy storage demonstrations for technologies by 2025 aimed at solving emerging grid challenges and paving the way for emissions reductions. 

Clean Hydrogen Demonstrations: Hydrogen and fuel cells have the potential to significantly reduce carbon emissions from multiple sectors: power, transportation, buildings, and industry. With its wide-range of applications, hydrogen can tackle difficult to decarbonize industries and help the U.S. get all the way to zero. Realizing hydrogen’s potential will also build a diverse set of  jobs in a fast-growing industry. Congress should provide $1 billion for multiple hydrogen demonstration projects. These demonstrations should, at a minimum, target industries such as port operations,  heavy-duty land and marine transportation, heat and power applications in buildings, and iron/steel manufacturing. The funding should build on existing programs and existing partnerships among the national labs and DOE.

Carbon Capture Demonstrations:  Carbon capture  is one of the only technologies that can address emissions from hard-to-abate industrial processes, and remains a critical tool for decarbonizing natural gas power plants. Meanwhile, direct air capture (DAC) will be needed to remove gigatons of carbon dioxide from the air to achieve our climate goals. Recent research has shown carbon capture projects will generate hundreds to thousands of high-wage, high-skill jobs. Congress should provide $3 billion in funding for large-scale carbon capture, use, and storage (CCUS) demonstrations at industrial facilities in hard-to-abate sectors like steel, cement, or chemicals. An additional $3 billion should be invested in demonstrations of CCUS at natural gas power plants and DAC facilities (specifically no less than two natural gas facilities and one DAC facility).