Federal delays stall alternative energy projects
Another bottleneck in the federal stimulus pipeline is coming to light: bureaucratic delays are tying up payments for small-scale solar and wind energy systems in Minnesota.
The problem is similar to what is holding up low-income weatherization projects in the state, which MPR previously reported on.
Randy Hagen owns a small company in west central Minnesota called SolarSkies that manufactures solar panels. The stimulus bill was supposed to help people like Hagen.
"In fact it's had a negative effect on us right now," he said.
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Instead of bolstering his business, Hagen said the stimulus bill has cost him business and he said those reduced sales have forced him to cut a couple of positions. It's not at all what he expected when the stimulus bill was passed.
"As this was intended and released in the spring of the year, the idea of the stimulus is to stimulate and not wait for the following year for action to happen," he said.
The problem is that the Department of Energy has yet to approve Minnesota's plan to make $5 million in stimulus rebate money available to homeowners and small businesses for green energy projects. Nobody knows how many jobs that money might create.
Months ago, Hagen was up in arms about the delays and sent a letter to state regulators questioning the holdup and reminding them that the stimulus was intended to put people to work. Now, he's nearly written off the notion that recovery money will boost his Minnesota sales this year.
"We're kind of missing the heyday of our season here, which is summer."
"We're kind of missing the heyday of our season here, which is summer," he said. "I think we've missed a golden opportunity."
It's not just Hagen who's hurting though. Local suppliers are not getting as much of his business and installers are losing out as well.
"Well, you've heard of that old hurry up and wait? Well we're hurrying up and waiting," said Ralph Jacobson, owner of Innovative Power Systems, a Minneapolis company that install alternative energy equipment.
Like Randy Hagen in Starbuck, Jacobson thought he'd be busy with stimulus work by now. Instead, he says he has a dozen customers ready to go with green energy projects, but they are waiting on the sidelines for the rebate rules. Jacobson is as frustrated as Hagen, given the intent of the stimulus package.
"This could be a real driver of job growth, the green jobs that we've heard so much ballyhoo about, but you know you [are] hurrying up and waiting. It's a holding pattern," Jacobson said.
Similar complaints have been pouring into the state Office of Energy Security.
"I think everybody is a bit...either frustrated or puzzled by the delays that have happened in getting stimulus dollars out," said Jeremy de Fiebre, who coordinates all of the stimulus energy programs at the Office of Energy Security.
De Fiebre said the state submitted its plan to the U.S. Department of Energy in May. He said concerns over meeting environmental and prevailing wage standards are behind the delays.
De Fiebre said he's confident Minnesota will soon get the go ahead from the federal government, but like manufacturers and installers, de Feibre too said it's unfortunate the payments are taking so long.
"This is work that could have happened," he said. "This is a benefit both in energy and in jobs that could have happened already that hasn't happened...People are starting to look at winter coming on and saying 'Are we going to be able to get these jobs done before winter?'"
De Fiebre said getting final Department of Energy approval has been a problem all over the country, not just for Minnesota.
Obama Administration officials acknowledge there have been backlogs. But Matt Rogers, the senior advisor to the Secretary of Energy for recovery act implementation, said approval of state programs has been right on track. He said any remaining barriers preventing Minnesota from moving ahead should be resolved in days not months.
"As much as we want you know to just write the checks and get them out there, the need to make sure that we were funding the best projects and the American tax payers was getting a good return on their funds said we had to do this in a measured pace," Rogers said. "I think we've been striking that balance and again hitting all the measures that we set out back when the recovery act was passed."
Green energy installers say it's not just the initial boost from the rebates they're looking forward to. They say alternative energy systems attract attention and help promote future sales.