Summary

Renewable energy technologies generate electricity, fuels, and heat through the use of resources that are continually replenished, such as the sun, wind, geothermal steam and heat, plant and animal wastes, and hydropower. The Energy Department (DOE) has requested $330 million for its solar and renewable resources technologies program in fiscal year 1998--an increase of nearly $79 million over 1997 levels. The program is intended to advance clean, reliable, and affordable power through partnerships with industry and laboratories. This report discusses (1) the level of funding committed to research and development and other activities in fiscal year 1998, (2) the extent to which DOE's costs have been shared with private industry and the type of cost-share arrangements, and (3) the extent to which funds have been competitively awarded.

GAO noted that: (1) in fiscal year 1998, DOE proposes to spend $311 million of the $345 million Solar and Renewable Resources Technologies Program budget for solar and renewable energy R&D projects and $34 million for non-R&D activities; (2) the R&D projects range from experiments for increasing knowledge and understanding to full-scale engineering development; (3) because many of the renewable energy technologies already exist and are being improved to increase their efficiency and reduce cost, $55 million will be spent for operational tests/field validations--the phase of R&D that is closest to commercialization; (4) almost $16 million of the non-R&D funds will be used for program direction, including salaries, travel, and administrative services; (5) the remaining non-R&D activities include information dissemination, incentive payments to public power entities, and laboratory maintenance and construction; (6) DOE leverages federal funds and encourages commercialization of renewable energy technologies by requiring industry and other partners to share the R&D costs; (7) during fiscal years 1996 and 1997, private industry and other groups' cost-sharing ranged between 3 and 84 percent of the cost of the research projects, depending on the renewable energy subprogram, the size of the firms involved, and the phase of R&D; (8) the cost-shares were in the form of cash or in-kind contributions, such as salary or equipment costs or a combination of both; (9) most of the funding agreements entered into by the Solar and Renewable Resources Technologies Program were awarded on a competitive basis during fiscal years 1996 and 1997; (10) the percentage of competitive awards ranged from none for some subprogram activities to 100 percent for others; (11) most of the subprograms awarded at least 50 percent of the funds competitively; and (12) according to DOE program officials, the contract funds awarded noncompetitively met allowable exceptions to competition.