Congress can consider authorizing $15 billion in federal grants to capitalize state-run revolving loan funds to increase access to low-cost capital and accelerate the adoption of advanced clean energy production.
One of the major barriers to the establishment of a domestic clean energy manufacturing industry is access to capital. Largely as a result of the recession, manufacturers, particularly small and medium-sized companies, continue to face a reduction in demand and difficulty in securing the needed credit. Therefore, Congress should allocate $15 billion to the Department of Commerce (DOC) for a new grant program to provide capitalization for state-managed revolving loan funds that provide low-cost financing for the retooling or expansion of clean energy production facilities and the adoption of advanced clean energy production techniques. The focus should be on facilities capable of producing commercially viable clean energy technologies for which there is (or is expected to be) a large or growing global demand. To effectively leverage federal dollars, state governments should contribute at least one dollar of their own funding for every dollar of federal funds. The loan program should also require state-coordinated plans that foster regional cluster initiatives building on public-private collaboration and coordination of innovation, production, and commercialization activities.