Investor: Renewable Energy Needs Federal Funding

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President Barack Obama has called for expanding America's renewable energy industry. i

President Barack Obama has called for expanding America's renewable energy industry. Here, he signs a directive on tailpipe emission standards, as Transportation Secretary Ray LaHood and Environmental Protection Agency Administrator Lisa Jackson look on. Saul Loeb/AFP/Getty Images hide caption

itoggle caption Saul Loeb/AFP/Getty Images
President Barack Obama has called for expanding America's renewable energy industry.

President Barack Obama has called for expanding America's renewable energy industry. Here, he signs a directive on tailpipe emission standards, as Transportation Secretary Ray LaHood and Environmental Protection Agency Administrator Lisa Jackson look on.

Saul Loeb/AFP/Getty Images

One of the big ticket items in President Obama's economic stimulus plan is a Clean Energy Financing Initiative. It reportedly would provide loan guarantees and other measures to encourage the private sector to invest billions of dollars in green energy — even as such investments have shriveled.

Funding for hundreds of projects has dried up because of the global financial slowdown, says Ray Lane, a managing partner with the venture capital firm Kleiner Perkins Caulfield and Byers in Menlo Park, Calif.

He says plans to harness wind and solar energy and to boost transportation efficiency will be abandoned if they don't receive capital.

"The only source of that capital today is going to be some help from the federal government," Lane tells NPR's Linda Wertheimer. And he says that help would take the form of loan guarantees, tax incentives and grants.

Obama and the federal government have plenty of incentive to bolster the "green" sector of the energy industry, according to Lane.

"The whole renewable energy field has the possibility of fulfilling exactly what President Obama wants — and that is to solve multiple problems with a single solution," Lane says. "This will help to burn less foreign oil, it of course helps the environment, and it will create new jobs."

As an example, Lane cites two companies he is affiliated with: a car company that is building a 50 miles per gallon vehicle, and a solar thermal company with projects planned that he says would create huge amounts of energy and thousands of jobs. Both initiatives will be halted without a capital infusion, Lane says.

But for the green energy movement to succeed, Lane says, the prices for alternative power must be competitive with the prices of current fossil fuels. "Consumers typically will not pay a premium just to go green."

The coming years should bring legislation for initiatives, such as a carbon price, meant to balance those costs.

"So solar, wind, electric cars will come down," Lane says, "and compete favorably with coal and oil prices that will be priced up because they are soiling the environment."

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