CORRECTED – Clean tech sector wants long term support from Obama

(Corrects to show an increase “from” $113 million in previous
budget in the second paragraph)

* Analyst says more investment is needed for major change

* Renewable energy trade groups welcome funding increases

* Clean power companies still rely on government support

By Poornima Gupta and Laura Isensee

LOS ANGELES, Feb 1 (BestGrowthStock) – Clean technology companies
welcomed hundreds of millions of dollars for the sector in the
Obama administration’s proposed budget released on Monday, but
called for more long-term support from the U.S. government for
the emerging industry.

U.S. President Barack Obama’s new budget includes nearly
$2.4 billion for energy efficiency and renewable energy
programs, an increase from $113 million in the previous
budget.[ID:nN01180827]

The renewable energy sector, which includes solar players
such as Suntech Power Holdings Co Ltd (STP.N: ) and SunPower Corp
(SPWRA.O: ) and wind turbine makers Vestas Wind Systems (VWS.CO: )
and Suzlon (SUZL.BO: ), struggled in 2009 amid the credit crisis
and a dearth of available financing for new projects.

The emerging industry still leans heavily on government
incentives. A bill to tackle climate change is stalled in the
Senate amid opposition from lawmakers from coal-and
oil-producing states, and many companies hope the United States
will adopt a renewable electricity standard requiring more
power from resources like wind and solar.

J.P. Morgan analyst Christopher Blansett said that measures
in the budget such as $500 million in credit subsidies for
energy efficiency and renewable energy projects do not account
for much in the “big picture perspective.”

“I don’t think people realize the scope of how much money
really needs to be spent to make big structural changes in
either our energy consumption, use or production,” J.P. Morgan
analyst Christopher Blansett said.

Blansett estimated that it will cost between $158 billion
to $445 billion if the United States adopts a national
electricity standard requiring 15 percent of all electricity in
the country to come from renewable resources by 2020.

The range of needed investment would depend on the mix of
renewable resources, he added.

CAP-AND-TRADE

In the budget, the White House called for a “market-based”
policy to fight climate change, but dropped prospects for
revenue from a climate cap-and-trade system opposed by many
lawmakers. [ID:nN01172964]

An absence of cap-and-trade legislation would force
renewable energy companies to be more creative in working with
local governments, said Chief Executive Amit Chatterjee of
Hara, which provides online software to help companies reduce
their carbon footprint and is backed by Silicon Valley venture
capital firm Kleiner Perkins.

“That means states and municipalities will have to step
forward and really provide some of the backstop that I think
they were hoping will happen in the cap-and-trade,” Chatterjee
said.

In Webcast remarks, Obama defended his support for the
nuclear industry, which is slated to receive an additional $36
billion in loan guarantees for a total of $54 billion, and said
there was a need for clean coal technology.

“Unfortunately no matter how fast we ramp up those energy
sources we’re still going to have enormous energy needs that
will be unmet by alternative energy,” he said.

POSITIVE STEPS

Still, renewable energy trade groups, chief executives at
clean tech companies and environmental groups welcomed some of
the measures proposed by the White House.

The budget “conveys the administration’s commitment to the
continued growth of the solar industry,” said Rhone Resch,
president and chief executive of the Solar Energy Industries
Association, an industry group whose members include both U.S.
and foreign solar power companies.

Resch noted in a statement that the budget includes $302.4
million — a 22 percent increase — in funding for solar power
programs.

The American Wind Energy Association echoed positive
reaction, citing that the budget reflected a commitment to the
wind industry, but called for the U.S. Congress to pass a
renewable electricity standard with strong near-term targets.

Stock Investing

(Reporting by Laura Isensee in Los Angeles and Poornima Gupta
in San Francisco; additional reporting by Steve Holland in
Washington)

CORRECTED – Clean tech sector wants long term support from Obama