B2B sfyh.comWASHINGTON – The Obama administration claimed this week that $100 billion invested in innovative technologies under the economic stimulus law is “transforming the American economy” by putting the nation on track for technological breakthroughs in health care, energy and transportation.
Increasing renewable energy
The claim: Thanks to the stimulus, the U.S. is on track to “doubling U.S. renewable energy generation capacity and U.S. renewable manufacturing capacity by 2012.”
The facts: While the Recovery Act has helped increase renewable energy, the fact that it is a one-time jolt makes it difficult to project that the growth will continue for the next couple of years. George Sterzinger, executive director of the Renewable Energy Policy Project, a Washington think tank that promotes renewable energy, said the Recovery Act’s cash grant program for renewable energy projects “jump-started a lot of stuff. But there’s nothing beyond that.”
Cutting the cost of solar power
The claim: Government stimulus money will lead to “cutting the cost of solar power in half by 2015, putting it on par with the cost of retail electricity from the grid.”
The facts: That projection assumes a huge payoff from stimulus spending on technology improvements in solar energy. Nelson, who has worked in renewable energy for 25 years, called the prediction “highly unlikely,” unless there is a big increase in utility-scale solar power projects.
High-speed rail
The claim: “With $8 billion in funding, the Recovery Act is beginning to make high-speed rail a reality across the country.” Projects selected for funds represent “strategic investments” that will yield high-speed service or lay the groundwork for future service.
The facts: The largest project is one that would connect San Francisco with Los Angeles, using trains traveling up to 220 mph. But some of the projects getting stimulus money would primarily upgrade existing freight rail tracks so they could be used for faster passenger service, reaching speeds of up to 110 mph at least part of the time — well short of the speeds in other developed countries.
Electric vehicles
The claim: The stimulus has helped produce “significant steps toward affordable electric cars that can drive 300 miles on a single charge, powered by $10 of clean electricity instead of $50 dollars of oil. Ultimately this means consumers may have the choice among a range of vehicles from a combustion vehicle with over 50 miles per gallon or an electric-drive vehicle for the same price.”
The facts: While strides are being made, this vision of the future rests on assumptions that many regard as overly optimistic. Even a White House task force on the auto industry’s recovery said while General Motors’ extended-range plug-in hybrid, the Volt, “holds promise, it will likely be too expensive to be commercially successful in the short term.” At $41,000, the Volt is about twice the price of a conventional midsize car. The price of electric cars will drop, but automakers are years from being able to sell them at the same price as cars with internal combustion engines.
Another hurdle is fuel prices, which are relatively low and provide little incentive to consumers to spend thousands of dollars extra for a hybrid or even more for a plug-in car; it would take years for the fuel savings to outweigh the higher price.
And there are questions about whether the large lithium ion batteries needed for electric cars are durable, safe and affordable enough for widespread use.
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Tags: consumer, earnings, economic recovery, economy, financial crisis