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Return On Clean Energy Investments Under The 2009 Recovery Act

Investing in clean energy jobs stimulus has a proven track record

The 2009 American Reinvestment And Recovery Act Made Modest Investments In Clean Energy, But Generated Strong Returns In Economic Growth

  • The American Reinvestment and Recovery Act included more than $45 billion for energy programs, mainly energy efficiency and renewable energy. 
    • More than $11 billion came in the form of grants for state and local governments through three key Department of Energy programs, including
      • The Weatherization Assistance Program, which provided energy efficiency services to low-income households
      • The State Energy Program, which provided states with discretionary funding that can be used for various energy efficiency and renewable energy purposes
      • The Energy Efficiency and Conservation Block Grant Program, which aimed to help reduce energy use and greenhouse gas emissions
    • Nearly $5 billion went to improve energy efficiency in government buildings
    • Nearly $8 billion went to R&D programs
    • $2.4 billion went to energy technology and facility development grants
    • $14 billion went into electric grid infrastructure improvements
  •  On top of that, the Recovery Act provided more than $21 billion in energy tax incentives.
  • The construction of new wind and solar generating capacity alone under the Recovery Act’s loan program was estimated to have created between $26 and $44 billion in economic output.
  • The full ARRA (including green provisions and other stimulus) raised U.S. GDP by between 2 and 3 percent from late 2009 through mid-2011.

The Recovery Act’s Clean Energy Investments Spurred Private Sector Investment And Supported Jobs Across The Industry:

  • The clean energy programs of the American Recovery and Reinvestment Act (ARRA) supported roughly 900,000 job-years (full-time jobs over one year) from 2009 to 2015.
  • ARRA helped support the training of over 30,000 students for solar and clean energy careers.
  • Prior to the COVID-19 pandemic, the clean energy industry was adding jobs 70% faster than the overall economy. 
    • In 2018 and 2019, America’s energy efficiency businesses led the nation’s energy economy in creating jobs.
  • At the start of 2020, there were 3 times as many clean energy jobs as fossil fuel jobs, and 2.5 times as many renewable energy jobs as fossil fuel electric power generation jobs. 
  • At the start of 2020, the clean energy industry employed 3,355,419 Americans, including:
    • 2,378,893 jobs in energy efficiency.
    • 522,811 jobs in renewable energy.
    • 345,393 jobs in solar energy.
    • 114,774 jobs in wind energy.
    • 266,368 jobs in clean vehicles. 
    • 76,669 jobs in clean energy storage.
    • 67,945 jobs in grid mobilization. 
  • ARRA leveraged approximately $150 billion in private and other non-federal capital for clean energy investments.
    • Private equity investment in renewable energy in the U.S. hit a record of $23.7 billion in 2020. 
    • The share of private equity funds allocated towards renewable energy has increased significantly since 2016, standing at about 80% of all energy investments made this year as of July 2021.
    • As of July 2021, private equity investments dedicated to renewable energy were outpacing fossil fuel asset fundraising by a factor of around 25.
  • ARRA supported more than $40 million in total investment, including:
    • NRG Solar and MidAmerican Renewables’ Agua Caliente photovoltaic solar slant: upon construction, Agua Caliente’s 290 MW plant in Arizona was one of the largest utility-scale solar PV projects in the world.
    • Brookfield Renewable’s Granite Reliable Wind Farm: the 99 MW wind project in New Hampshire was one of the first onshore wind projects to use a 3 MW turbine for its electrical generation technology – leading to cost reductions on a per-megawatt basis.

The Recovery Act’s Clean Energy Investments Led To Record Renewable Production:

  • ARRA supported the installation of more than 104,000 wind, solar, geothermal and biomass projects that provided more than 33 GW of power – enough to power more than 8 million homes each year. 
  • The Recovery Act helped boost solar and wind production well above levels that were projected before the Act was implemented.
    • By 2011, wind production had already surpassed the Energy Information Agency’s predictions for installation by 2030. The nation surpassed the state’s collective 2020 renewable energy goal in 2018. 
    • ARRA propelled a dramatic increase in the share of domestically produced wind turbine components used in the U.S. – from 25% in 2006-2007 to 72% in 2012.
  • In the decade following the Recovery Act, wind generation increased five fold and solar generation grew by a factor of 48.
    • From 2010 through 2020, the U.S. more than tripled its wind power generation capacity. Wind power accounted for 30% of utility-scale power capacity additions in the U.S. from 2009 through 2019.
    • In the last decade, U.S. solar has seen an average annual growth rate of 49%.
  • In 2008, solar produced 0.1% of the country’s power and wind produced less than 1%. Today, solar and wind power provide 10% of the country’s electricity.
    • A 2020 report from Environment America’s Research & Policy Center found that the U.S. produced over 30 times more solar power and more than three times more wind power from 2010 to 2019.
  • ARRA spurred a reduction in cost for many clean energy technologies: 
    • The AARA expanded the Production Tax Credit (PTC) and Investment Tax Credit (ITC), both of which made renewable energy more affordable. Costs have fallen so dramatically that solar and wind power are now two of the cheapest sources of electricity generation.
    • Since 2010, utility-scale solar PV power has declined in cost by 82%, followed by concentrating solar power (CSP) at 47%, onshore wind at 39% and offshore wind at 29%.
      • Costs for solar and wind power technologies have continued to fall annually. Electricity costs from utility-scale solar PV fell 13% in 2019 to a global average of 6.8 cents (USD 0.068) per kilowatt-hour (kWh). Onshore and offshore wind both declined about 9%, reaching USD 0.053/kWh and USD 0.115/kWh. 
    • In the last decade, the costs of solar installation have dropped by more than 70%. 
    • Over the last ten years, a surge in production of lithium-ion batteries has led to an 85% drop in prices for battery packs used in electric vehicles, making EVs and energy storage commercially viable.
  • A 2015 Lund University study concluded that the Recovery Act “played a significant role” in increasing the US’s renewable energy installations.

The Recovery Act’s Clean Energy Investments Saved Energy:

  • ARRA energy efficiency investments were projected to save over 400 million MMBtu (million British thermal units) of energy over four decades.
  • ARRA support helped weatherize over 800,000 homes, reducing energy consumption and costs for American households.
    • ARRA increased funding for the Weatherization Assistance Program, increasing energy efficiency of low-income households from $230 million annually to $5 billion over three years, and providing long-term public health relief. 
  • ARRA funding for the Smart Grid Investment Program supported the installation of 16 million smart meters.
  • On average, energy efficiency programs save families more than $3,000 on their heating and cooling bills over the lifetime of measures installed.