Thanks Uncle Sam

Fisker Automotive plans to use a loan from DOE.

In some ways one the biggest stories of 2010, at least in the world of clean energy and energy efficiency, is likely to be a continuation of what was arguably the biggest story of 2009—the federal government’s decision to pump $787 billion into the economy via the American Recovery and Reinvestment Act.

A substantial dose of those funds— about $50 billion in spending and $20 billion in tax incentives—was tagged to go toward renewable energy, energy efficiency and cleantech projects. And while 2009 saw some notable happenings spurred by the feds’ largesse, many of the stimulus package’s impacts lay ahead.

As of late 2009, about $18 billion in stimulus funds had been disbursed to state and local agencies for energy efficiency, carbon capture and sequestration, renewable energy and grid improvements, according to research firm Renewable Energy Finance. Of that $18 billion, about $9.5 billion had been allotted and directed into the market, with the rest expected to reach its targets in the next two years.
As for how the stimulus package is working to spur investment in companies in sectors such as cleantech and renewable energy, which are receiving heavy government backing, analysts differ about the immediate impacts.

Initially, the promise of an infusion of dollars may have been a hindrance to funding as investors wait to see how the rules of various programs will be defined, says Lee Bailey, managing director of Los Angeles–based private equity firm U.S. Renewables Group. But that hesitation will likely dissipate as the details of remaining programs are ironed out, and government funds continue flowing, he adds.
Still, despite any hesitation, venture funding in cleantech firms increased by almost 50 percent in 3Q 2009, reaching a total of $965 million in 50 financing rounds, according to a report by Ernst & Young. Some of the companies that brought in the biggest private investments in 2009 were also early winners of federal dollars, though generally through government programs launched before the stimulus package was enacted.

Thin-film startup Solyndra in 2009 was the first company to receive funds—$535 million—through a Department of Energy loan guarantee program. The Bay Area company subsequently closed a $200 million financing round to go toward building a new manufacturing facility.

Electric vehicle manufacturer Tesla Motors and plug-in hybrid maker Fisker Automotive each raised more than $80 million in venture funding in 2009, coupled with more than $500 million each in loans from DOE’s Advanced Vehicle Technology Program.