On May 27, 2009, the Department of Energy ("DOE") announced detailed plans to distribute over $467.6 million to fund solar and geothermal initiatives under the American Recovery and Reinvestment Act of 2009[1] (the "Stimulus Package Act"). The DOE will distribute $117.6 million for solar energy initiatives, and an additional $350 million for geothermal energy programs.

These solar and geothermal investment programs will provide new sources of funding to help expand and accelerate the development, deployment, and use of solar and geothermal energy throughout the U.S. This Stimulus Package Act funding is aimed at assisting the solar and geothermal industries in overcoming technical barriers, demonstrating new technologies, and providing support for clean energy jobs in the future.

On May 28, the DOE issued a Funding Opportunity Announcement ("FOA") for the Solar Energy Deployment initiative. This FOA calls for applicants to apply for funding under one of two categories: (1) Solar America Cities Special Projects, and (2) Solar Workforce Development. Eligibility under Category 1 is restricted to the existing 25 cities already named Solar America Cities. Category 2 is open to applicants interested in creating and managing the operations of the National Consortium for Solar Installer Instructor Training. The DOE will accept grant applications through July 30, 2009.

On May 27, 2009, the DOE issued an FOA for Foundational Photovoltaics and Concentrating Solar Power Research and Development. Eligibility is limited to DOE National Laboratories, and the DOE will accept grant applications through July 15, 2009.

We expect that in the very near future, the DOE will issue FOAs soliciting applicants to apply for grants to fund the other solar and geothermal programs included in its recent announcement regarding the distribution of Stimulus Package Act funds.

Summary of Solar Energy Investments

The DOE plans to invest the $117.6 million for solar energy projects, as follows (in millions):

These solar energy investments will be used to scale up manufacturing, production, and distribution in the U.S. solar industry, with the goal of helping solar technology become cost-competitive with conventional sources of energy.

Funds allocated to Photovoltaic Technology Development will be invested in the development of advanced photovoltaic concepts and high impact technologies, with the aim of making solar energy cost-competitive with conventional sources of electricity and strengthening the competitiveness and capabilities of domestic manufacturers. Part of the funding for this initiative is available to DOE National Laboratories through the FOA described above. Additional funding for the Photovoltaic Technology Development initiative will be available in subsequent FOAs.

Investments in Solar Energy Deployment will fund projects focused on non-technical barriers to solar energy deployment, including grid connection, market barriers to solar energy adoption in cities, and the shortage of trained solar energy installers. Combined with new technology development, the goal of these deployment activities is to facilitate more widespread adoption of solar energy in residential, commercial, and municipal environments. Part of the funding for these projects is available through the FOA described above. Additional funding for the Solar Energy Deployment projects will be available in subsequent FOAs.

Funding for Concentrating Solar Power Research and Development will focus on improving the reliability of concentrating solar power technologies and enhancing the capabilities of DOE National Laboratories to provide test and evaluation support to the solar industry. Part of the funding for this initiative is available to DOE National Laboratories through the FOA described above. Additional funding for the Concentrating Solar Power Research and Development initiative will be available in subsequent FOAs.

Summary of Geothermal Energy Investments

The DOE plans to invest the $350 million in geothermal energy projects, as follows (in millions):

Funding for Geothermal Demonstration Projects will support demonstrations of cutting-edge technologies to advance geothermal energy in new geographic areas. This funding will also support demonstrations of geothermal energy production from oil and natural gas fields, geopressured fields, and low- to moderate-temperature geothermal resources.

Investments in Innovative Exploration Techniques will support projects that include exploration, siting, drilling, and characterization of a series of exploration wells utilizing innovative exploration techniques. DOE's investment will reduce the level of up-front risk inherent in the exploration of geothermal energy resources in the private sector. DOE's goal is to facilitate increased investment and discovery of new geothermal resources.

Investments in Enhanced Geothermal Systems ("EGS") Technology Research and Development will fund research of EGS technology to facilitate geothermal power generation across the U.S. Conventional geothermal energy systems are not capable of nationwide use, because they must be located near easily accessible geothermal water resources. EGS, however, uses available heat resources through engineered reservoirs, which can then be tapped to produce electricity. Research and development of EGS technology supports DOE's long-term goal to use EGS to generate cost competitive clean electricity.

Funding for the National Geothermal Data System, Resource Assessment, and Clarification System, will support three initiatives to characterize geothermal energy resources nationwide: (1) a nationwide assessment of geothermal resources working through the United States Geological Survey ("USGS") and other partners; (2) development of a nationwide data system to make resource data available to academia, researchers, and the private sector; and (3) development of a geothermal resource classification system for use in determining site potential.

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Additional details regarding DOE's release of subsequent solar and geothermal FOAs, and implementation of solar and geothermal funding in the Stimulus Package Act will be forthcoming in future guidance to be posted by the DOE to www.recovery.gov and www.energy.gov/recovery.

The solar and geothermal funding via the Stimulus Package Act that will be made available to developers and manufacturers of solar and geothermal system components can create critical opportunities for your company. For further information on the program and for assistance in applying for these grants, please contact any of the attorneys listed in the sidebar.