Report: Without policy support, cleantech sector will falter

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Policy analysts warn that the U.S. cleantech industry could fall off a cliff without a change to policy.

Without a change to U.S. policy the cleantech sector is poised to take a dive off a rather high cliff, according to a new report released Wednesday by the Brookings Institution.

The report, a paper called "Beyond Boom & Bust," tracks the clean energy sector's progress in recent years and warns of an approaching decline.

Total federal spending on the industries that make up the cleantech sector — non-carbon energy sources from nuclear to advanced battery technology — came in at $44.3 billion in 2009, according to the report, bolstered by the American Recovery and Reinvestment Act. The amount of federal funding has been falling steadily since then, projected to be $16.1 billion this year and to fall to $11 billion by 2014.

The reports policy analyst-authors, who hail from Brookings, the Breakthrough Institute and the World Resources Institute, argue that the sector, which created 70,000 jobs — some of them in the midst of a recession — needs a comprehensive energy policy overhaul to survive the boom and bust cycle.

The authors suggest that some subsidies — such as the Production Tax Credit — are necessary to give the industry an opportunity to mature enough to compete without them.

"Well-designed policies that successfully drive innovation and industry maturation could provide U.S. clean energy sectors a more stable framework within which to advance toward both subsidy independence and long-term international competitiveness," the report's authors conclude.

The full report is available here.