On July 15, the Senate Energy and Natural Resources Committee held a hearing on legislation to improve the availability of financing for deployment of clean energy and energy efficiency technologies and to enhance United States’ competitiveness in this market. Specific bills considered were S. 3233, introduced by Chairman Jeff Bingaman (D-NM) and S. 2730, introduced by Ranking Republican Pete Domenici (R-NM).
Representatives from the following organizations testified: U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy; Kleiner Perkins Caufield & Byers;
Dykema Gossett PLLC; Google.Org; and Hannon Armstrong.
Sen. Domenici opened by stating that he introduced his bill to help spur capital investment in new technologies, which he believes is the “most significant” activity that Congress must do over the next 10 years in the energy efficiency sector.
Witnesses made these points:
DOE said that government can do things to accelerate the process of increasing investment in energy efficiency and renewable technology. The private sector will continue to invest, but far greater capital formation needs to occur and the question is how it will occur. The witness also said that advanced energy technologies are needed to improve the nation’s energy portfolio.
Google.org said that, so far investment in energy efficiency has been inadequate and that if a risk portfolio is too high or return profile too low, investors will balk. Federal tax credits have spurred investment, but bankers are critical because the level of investment needed is beyond the capability of venture capitalists. He also urged support of both bills.
In the question and answer session, several Members noted the importance of improving energy efficiency and increasing the amount of renewable energy production. Sen. Domenici stated that he felt that, had many of the provisions of EPAct 2005 been implemented, the U.S. would have improved energy efficiency technologies already in place. Sen. Bingaman said that while both bills had important components, a failure of both bills is that they do not ensure financing for higher risk investments. Members of both parties agreed that investors need to have some assistance with making the leap to higher risk investments. Many investors will finance the second project, but not the first, so some insurance assistance from the government could be helpful.