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Obama’s Clean Power Plan Energizes Startups

Peter Lougee

Energy Columnist, 1776

On Tuesday, the U.S. Senate Committee on Environment and Public Works held a hearing to discuss President Obama’s Clean Power Plan, which the Obama administration proposed in August 2015. The Clean Power Plan defines the energy agenda for the remainder of Obama’s term and could present many opportunities for startups to leverage national policy to expand into the energy sector.

The primary goal of the new Clean Power Plan is, as The Washington Post reports, to “cut carbon dioxide emissions from U.S. power plants 32 percent below their 2005 levels by the year 2030.”

The plan provides tailored emission reduction targets for each state, leaving the exact details and steps necessary to achieve those targets up to the state governments. The Clean Power Plan does, however, offer examples of “building blocks” that states can consider while making plans to achieve their reduction targets. The guiding options include increasing power generation from renewable sources, such as solar and wind, increasing the efficiency of existing power plants and transitioning away from coal-fueled electricity generation.

Without hesitation, the coal industry made its opportunity to Obama’s proposed regulations known, but on the other hand, the renewable energy market was thrilled about the new potential limits on pollution. Additionally, the plan’s flexible timeline motivates states to move quickly and capitalize on any additional incentives from the U.S. Environmental Protection Agency.

Indeed, Obama’s administration has already started to offer such incentives. Gizmodo writes that Obama announced new “incentives to help homeowners borrow money for energy upgrades and a better way for manufacturers to measure energy efficiency.” The incentives include tax credits for solar panel adoption, a solar program for low-income neighborhoods and a $24 million research investment for solutions to make renewable energy sources more efficient and affordable.

Perhaps most significantly, the Clean Power Plan also announced an addition $1 billion in Department of Energy loans, and that loan program has previously funded startup development of solar panels and other renewable energy innovation.

Even though Obama’s political opposition criticized the loan program after its recipient, Solyndra, failed, the renewed funding did produce significant change. Now, the loans can go toward “distributed energy” projects, which are decentralized technologies such as roof top solar panels or computing intelligence to route renewable energy directly to consumers through the grid.

The Obama administration’s recent energy agenda presents a great deal of opportunities for startups to hack a highly regulated industry. Currently, most energy innovations — solar panels, distribution systems, battery development — are coming from tech startups just beginning to see regional success for their efforts in the renewable space. With the right policies and incentives in place at both the national and state levels, the renewable energy market will continue to flourish and could begin to see widespread adoption.

Although stiff political opposition from traditional energy lobbies often stand in the way of environmental advocacy, the Clean Power Plan represents one of the most vital and focused political agendas supporting renewable energy development and adoption. If the plan survives the expected barriers, the right incentives will already be in place to encourage states to advance renewable energy innovation.

In the meantime, startups will start to see gradual progress as national- and state-level policies take effect, and startups will be able to take advantage of growing consumer incentives to adopt renewable energy. In any likely scenario, energy startups should pay careful attention as the Clean Power Plan’s solidifies and takes hold because changed regulations have the potential to offer startups greater access to the market.

Peter Lougee

Energy Columnist, 1776

Peter is a Washington, D.C.-based freelance writer with a Master's Degree in Public Policy from American University. In addition to startups, Peter likes coffee, books and whiskey.