Innovating Toward our Next Great Industry
Yesterday, from the White House, Vice President Biden released a new report, “The Recovery Act: Transforming the American Economy through Innovation,” which outlines how the administration’s $100 billion investment in innovation has been, for the most part, money well spent. In his remarks, Biden highlighted four key areas where stimulus money was working:•Modernizing transportation •Jumpstarting the renewable energy sector •Investing in groundbreaking medical research •Building a platform that will enhance the private sector’s
The recurring theme in the speech was that without innovation, the prospect of creating America’s next great industries will remain an elusive fantasy. The Recovery Act has been one of the main catalysts for turning that fantasy into reality. But, as Biden made clear, the government can only do so much; in the end, it is the private sector that will drive this change. He noted: “Government plants the seeds, the private sector makes them grow, and we launch entire industries, create hundreds of thousands of jobs, and spark new forms of commerce that were once unimaginable.”
While the vice president lamented this country’s lackluster investment in renewable energy over the last thirty years, causing the U.S. to lose its competitive edge, the administration is quickly making up for lost time. President Obama, Secretary of Energy Steven Chu and Vice President Biden have set a joint goal to double U.S. renewable energy generation capacity from wind, solar and geothermal by 2012, which the report states is ahead of schedule. Because of stimulus-funded solar energy projects, the U.S. is now on pace to cut the cost of solar power in half by 2015, bringing the price of this energy source ever closer to achieving the ‘holy grail’ of grid parity. Biden even speculated that one day solar power could be “cheaper than electricity from the grid,” but it is going to take scale to get the job done.
Increasing renewable energy generation capacity will invariably spur an increase in renewable energy manufacturing capacity as well. If the U.S. can achieve its goal of doubling its annual output of 6 GW of renewable equipment to 12 GW by the end of next year, this would increase our country’s share of global manufacturing of solar PV modules from 8 percent of all production to 14 percent by 2012. Ensuring that the necessary incentives are in place for keeping clean energy manufacturers in this country, and potentially attracting foreign companies to relocate their operations here, will be key. This is why it is so vital that programs like the Manufacturing Tax Credit (48C) be extended. Already, the House Ways & Means Committee has circulated a discussion draft of the Domestic Manufacturing and Energy Jobs Act of 2010, which includes an expansion of the 48C program. Ways & Means, along with the full House, needs to move forward with this in September, and the Senate ought to follow suit. A national renewable electricity standard (RES), which the Senate will hopefully take a closer look at when it returns from recess next month, would also go a long way toward keeping the U.S. a leader in this emerging industry.
Without an RES at the national level, the fight will be forced to happen at the regional and state levels, which will undoubtedly slow down the transition toward a clean energy economy. The opportunity to achieve a strong federal RES is something we simply can’t lose.
We have the seeds to become a dominant force in this next great industry; let’s make sure we make them grow.