U.S. Energy Innovation Ecosystem is Underfunded and Skewed Towards Deployment

March 11, 2013 by Jeff Shepard

A recent report published by the Information Technology and Innovation Foundation (ITIF) argues the American energy innovation ecosystem is underfunded and heavily focuses on deployment incentives over research and development, demonstration, and manufacturing. It further states that the federal government has failed to create a comprehensive energy policy that provides robust and consistent support for innovation from research through deployment.

The report, "Breaking Down Federal Investments in Clean Energy," analyzes total federal investments in energy innovation over the last four years as well as specific support for research and development, demonstration, deployment, and manufacturing. Among the findings, federal investment in clean energy manufacturing has declined 92 percent between 2009 and 2012 from nearly $9 billion to $700 million. In addition, in fiscal year 2012, close to two thirds of federal investments in clean energy went to the deployment and procurement of existing clean energy technologies.

"Although the Recovery and Reinvestment Act of 2009 stimulated public investments across the energy innovation ecosystem, many of these programs and incentives have since expired or concluded," notes Matthew Stepp, senior analyst at ITIF. "As a result, the energy innovation ecosystem has been hollowed out, with the overall emphasis of public investment shifting from promoting a healthy innovation ecosystem to one tilted much more towards deploying existing technologies."

The data analyzed by ITIF has been collected in the Energy Innovation Tracker, a public, transparent and accessible database of federal investments in energy innovation at the project level. The tracker was developed to inform the clean energy policy debate by defining federal investments in clean energy innovation by technology, innovation phase, and investment type. It also provides the public with greater understanding of how tax dollars are being spent.

"Numerous experts have noted that a host of new energy technologies will be required to support the goal of reaching deep greenhouse gas emissions cuts by 2050," Stepp adds. "With the Energy Innovation Tracker we hope to shine light on current federal investments in energy innovation and highlight weaknesses in American's energy innovation budget that require renewed policy support."