President Obama made a bold pronouncement in his first Oval Office speech last month: "Now is the moment for this generation to embark on a national mission to unleash America's innovation," he said. It's not too big of a project, because "the same thing was said about our ability to land a man safely on the moon." The government's clean energy push may not be man-on-the-moon scale yet, but this weekend's nearly $2 billion loan guarantee for solar power is a decent start.
The U.S. Department of Energy is taking advantage of last year's Recovery Act to dole out $1.85 billion in loan guarantees to Abound Solar Manufacturing and Abengoa Solar. Abound will receive $400 million to build thin-film solar panels at two plants in Colorado and Indiana. When the plants reach full capacity in 2013, Abound estimates that they will generate 1,500 permanent jobs along with millions of solar panels on an annual basis.
The vast majority of the funds—$1.45 billion—will go to Abengoa Solar, which is building the first large-scale solar plant in the United States that can store the energy it generates. The gargantuan plant, set to be built near Gila Bend, Arizona, will generate 280 megawatts of power at full capacity, or enough to power over 70,000 homes. It will also create 85 permanent jobs.
The cash is especially good news for Abengoa, a Spanish company that will likely be hit hard if Spain abolishes its ambitious solar subsidies. The United States' ability to attract a company from Spain—the fourth largest manufacturer of solar power technology in the world—is a notable achievement, according to Obama. "After years of watching companies build things and create jobs overseas, it’s good news that we’ve attracted a company to our shores to build a plant and create jobs right here in America," the President explained in his speech.
The government's loan guarantees are impressive, to be sure, but they are also a sobering reminder of just how much it will cost us to transition away from dirty energy. We can kick-start the solar industry with $2 billion, but it's just a tiny fraction of the money we'll need to really get things going.