California will pour billions of dollars into new green energy subsidies over the next few years. $2.5 billion will go to energy conservation programs under Proposition 39, which closes a corporate tax loophole and allocates about half of the new revenue to environmental goals for five years.
The state has also begun selling “carbon allowances” as part of a cap-and-trade program to reduce greenhouse gasses. Revenues from those sales could reach $11 billion a year by 2020, and will be used for clean energy development.
Although existing law requires that a portion of the funds from Prop 39 go toward schools, the rest of the money is up for grabs. Specific provisions for new private sector jobs to improve the energy efficiency of commercial and residential buildings, and job training on energy efficiency and clean energy projects opens the door for many clean-energy companies to benefit, according to Nancy Pfund, managing partner of DBL Investors.
Venture capitalists say that depending on how the final rules are drafted, a wide range of startups could benefit, including automatic lighting and darkening window-maker Soladigm; solar-installer Solar City; light-emitting diode lighting company Soraa; fuel-cell company Bloom Energy; green masonry company CalStar; and solar-module company Suniva.
Large multinational companies like manufacturer Honeywell International Inc and engineering giant Siemens AG, are also keeping their eye on California closely, hopeful they too can reap benefits from the new policies for their energy-efficiency products, executives at the companies said.
The money raised by Prop 39 also has the potential to be combined with another new source of clean energy cash – about $1 billion the state expects to raise over the next fiscal year as the state’s pioneering carbon market opens.
The carbon funds and the new Prop 39 funds could go into a single pot, such as a loan program that could be tapped by homeowners, cities and industries.
Decisions on how the money from Prop 39 is distributed will move to the state legislature in early January 2013. Expect lobbying to begin soon, especially since observers say that Prop 39 doesn’t offer clear guidelines to how the money should be spent.
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