The US Government will invest US$46 billion in clean energy under the American Recovery & Reinvestment Act (ARRA), says the Council of Economic Advisors (CEA) in its fourth quarterly report on the economic impact of ARRA.

This will spark co-investments of US$106.7bn and boost the total national impact in clean energy to US$152.7bn.

Of total Government investment of US$95.4bn, the impact has been US$381.8bn, or US$3 for every US$1 of Government investment in clean energy. The best investment is in economic development, where ARRA's investment of US$13.9bn has resulted in US$132.3bn, or a return of US$9.51.

In some sectors, such as environmental cleanup, broadband, health, scientific research, and public safety and defense, the Government investment was higher than the co-investment from other sources.

ARRA has raised employment, relative to what it would have been without Federal support, by 2.5 million jobs by the second quarter of this year.

This suggests that employment is 3.6m higher than it otherwise would have been, so “the Recovery Act has met the President’s goal of saving or creating 3.5m jobs - two quarters earlier than anticipated.”

Clean energy is key element of the Act

“A central piece of the ARRA is more than US$90bn in Government investment and tax incentives to lay the foundation for the clean energy economy of the future,” it explains.

CEA’s second quarterly report grouped clean energy investments into 8 sub-categories:

• US$29bn for energy efficiency, including US$5bn to pay for energy efficiency retrofits in low-income homes;
• US$21bn for renewable generation from wind turbines and solar panels;
• US$10bn for grid modernization to develop the ‘smart grid’ that will involve sophisticated electricity distribution and transmission grid censors, and energy storage;
• US$6bn to support domestic manufacturing of advanced batteries and other components of advanced vehicles and fuels technologies;
• US$18bn for traditional transit and high-speed rail;
• US$3bn to fund crucial research, development, and demonstration of carbon capture and sequestration technologies;
• US$3bn for green innovation and job training to invest in the technology and workforce needed for a clean energy economy; and
• US$2bn in clean energy equipment manufacturing tax credits that increase manufacturing capacity for wind turbines, solar panels, electric vehicles, and other clean energy components domestically.

Under ARRA’s Energy Cash Assistance, individuals and companies that install certain types of renewable energy generation can receive a grant equal to 30% of project costs and that program has already disbursed US$4.7bn and supported US$13bn in total investment activity.

These clean energy investments include 650 solar and 17 biomass projects.

“Our analysis indicates that the Recovery Act has played a key role in the turnaround of the economy that has been occurring over the past year,” the report concludes.

“Public investment programs in the Recovery Act are funding critical investments in a wide range of areas.”