The fed’s piggy bank has been the subject of much debate this summer as Democrats and Republicans clashed over the deficit and budget planning.
No less controversial is federal financing of renewable energy projects, part of a strategy to both reduce national dependence on foreign oil and limit greenhouse gas emissions as part of addressing the threat of global climate change. But with federally-backed companies like solar manufacturer Solyndra recently filing for bankruptcy, some are saying that the government is making bad bets and investing in the wrong places.
At the National Clean Energy Summit on August 30, Vice President Biden proudly announced that five companies which received seed-funding from the Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E) are now raking in hundreds of millions from private investors all on their own.
“America is at its best when we innovate–and ARPA-E supports the very best of American innovation,” Biden said at the summit. The five ARPA-E backed companies “illustrate how a small but strategic investment by the federal government can pay big dividends down the road and bring into market groundbreaking new technologies.”
Though Solyndra received $535 million in federal loan guarantees to build its Fremont, California manufacturing facility, many Chinese solar manufacturing companies may be receiving millions more in support from the Chinese government, a factor that many in the industry hold is allowing companies like Suntech, Trina Solar and Yingli to crowd out American companies.
State-backed Evergreen Solar also filed for bankruptcy in August, despite government support.
Read the full story: Not So Evergreen.
The five ARPA-E backed companies each received between $1.5 and $6 million in seed funding for projects that could, if successful, transform the industry.
Phononic Devices designs thermoelectric devices to capture heat waste from power plants, factories and even vehicles and convert it back to electricity. The devices can also be used as energy-efficient cooling systems. It received $3 million in government seed funding and $11 million in private funding.
Primus Power and Stanford University both received funding for energy storage devices. Primus Power received $2 million in seed funding for developing a “flow” battery with high energy fluids that can optimally store electricity generated from wind and solar power. It has secured $11 million in private funding. Stanford University received $1.5 million in ARPA-E funding and has secured $25 million in private funding for commercializing a new type of energy storage device that can store greater amounts of power than a battery.
OPX Biotechnologies is developing bacteria that create liquid biofuel using electricity and carbon dioxide. The Colorado-based company received $6 million in government seed funding and has secured $36.5 million in private funding.
Finally, Transphorm received $3 million in seed funding and secured $25 million in private funding to develop compact semiconductors that can swiftly switch electrical currents to reduce power waste from electric motors.
By providing seed grants for the companies and helping them transition to private capital investments, the government agency has highlighted its own philosophy of leveraging federal dollars for far-reaching energy innovation rather than promoting manufacturing capacity additions.
Photo Caption: US Vice President Joe Biden (Left) appears with U.S. Senate Majority Leader Harry Reid (D-NV) after Biden spoke at the National Clean Energy Summit 4.0 at the Aria Resort & Casino at CityCenter August 30, 2011 in Las Vegas, Nevada.
