Even as the disaster in the Gulf of Mexico continues to threaten Obama’s green initiatives, the US president now faces a further challenge after it emerged that government mortgage
agencies have moved to stop his $150m solar stimulus program. Having made it to the White House partly on the back of promises to revolutionize US energy, Obama now faces a dilemma in ushering in new legislation.
The Obama administration hopes to promote the notion that the fight against climate change starts at home through the Property Assessed Clean Energy (PACE) program. As part of this initiative, the president is allocating $150m in loans for local governments which they can then lend to homeowners to cover the upfront costs of energy-efficient installations like solar. The loans can then be paid off gradually through property tax bills. However, Fannie Mae and Freddie Mac, the federally controlled agencies that guarantee more than 50% of America’s residential mortgages, are concerned that taxpayers will lose out in the long run if people start defaulting on PACE mortgages. Both have issued letters to mortgage sellers stating that they will not accept loans for homes using the program.
While Obama’s 2011 budget served only to squeeze the finances of many departments, renewables – particularly solar – experienced a boost. The Department of Energy’s Solar Energy Program, for instance, received a budget increase of 22% to $302m, with solar photovoltaic receiving the largest increase from $128.5m to $152m. This is in addition to President Obama’s request for a $5 billion expansion for solar manufacturing tax credits originally passed under the American Recovery and Reinvestment Act.
The budget was a clear indication of Obama’s faith in renewables as a central component of America’s energy future. The widespread acceptance of home installations and energy-efficient technology by US homeowners will play a central role in not only America’s contribution to global emissions targets, but also in ensuring future energy security through reducing dependence on foreign fuel.
However, the White House is increasingly divided over energy legislation, and that even a relatively minor energy initiative is failing to gain any ground is alarming for Obama. Fannie Mae and Freddie Mac actively opposing the PACE program undermines the president’s entire ideal that green industry will drive America forward, both environmentally and economically.
The conflict in Washington is putting at risk hundreds of millions of dollars of federal stimulus cash, state and private funding and countless jobs. Despite many believing that the oil rig disaster would unite the White House in a major shift toward renewable energy, it seems that the opposite may in fact be true. President Obama may find himself having to dilute his own green future plans if he is to keep hold of the support he risks losing.
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