Thank you, Michael, for that introduction and thank you all for coming.  It is good to be in New York, back among the financial community.

For those of you who don’t know, when I left M.I.T - where I taught chemical engineering - to enter the business world I started out as a venture capitalist.  It’s an industry, though we didn’t call it that then, I have now been associated with for 45 years.

I say this only to let you know I understand the challenges before you.  Had my life taken a different course, had I not had the blazing insight that I should go to Washington to help run the government, I might be involved in the development of renewable energy in the United States from the private sector - despite the challenges or perhaps because of them.

My time in business and my time in government - at Commerce, Treasury and now at the Department of Energy - have convinced me it is right for private markets to take the lead in developing new technologies like renewable energy, while the government should focus more exclusively on what it can and should do to enable private capital to perform in the public interest.

The government should, for example, be available to provide funding for the basic and applied research needed to develop new technologies needed to address critical national concerns, like the need to enhance U.S. energy security and climate change.

It should also be willing to create incentives that will help push promising technologies to commercialization.  And, where renewable energy technologies are concerned, it should create through investment, legislation and reasonable regulation, a stable policy environment that reduces uncertainty and minimizes risk over the longer term.

In this way, government action can bring -- will bring the broadest possible types of investors and investments to all parts of the energy supply chain and stimulate new R&D in the private sector.

It is these concepts that illuminate the President’s energy policy and its three main goals: one, that America should diversify its energy portfolio, both supply and suppliers; two, that America should utilize emerging clean energy technologies to their full potential and maximize our economy’s energy efficiency; and, three, that the private sector should, as a general rule, lead in these efforts … with the government supporting growth at an accelerated pace.

For example, the President’s American Competitiveness Initiative increases support for basic research in the physical sciences.  His Advanced Energy Initiative is a focused plan to accelerate public investment in promising clean energy technologies by leveraging the development of new energy and efficiency technologies already underway that gets them to market faster and in a cost-effective way.

Sometimes though, government can and should take the lead.

The President’s “20 in 10” plan utilizes a new alternative fuels standard and reforms the auto efficiency standards to reduce projected gasoline consumption by 20 percent in the next ten years.  “20 in 10” is among the most ambitious policies ever put forward in its size, scope and timetable.  It is important that Congress act on it with the urgency it deserves.

There are other ways government can, and is, leading.

Earlier this year the Department of Energy announced, as part of the Solar America Initiative, $168 million in funding for Solar Technology Pathway Partnerships.  These partnerships are bringing industry, universities, our DOE national labs and not-for-profit entities together in an effort to help lower manufacturing and retail costs while improving solar efficiencies.  Our ultimate goal is to reach parity pricing with conventional electricity by 2015, just eight years from now.

As the next step toward that goal, I am pleased to announce today that the Department is going to provide $2.5 million in federal financial assistance to 13 “Solar America Cities” – New York among them -- that all have committed to building a sustainable solar infrastructure.

The significance of this grant should not to be measured in terms of dollars spent.  Its significance comes from the research, the competition and the activity in the marketplace that it will stimulate.  The growth in the demand for solar technologies it will stimulate by establishing purchase programs and market infrastructure in some of America’s largest cities will create a ripple effect that will boost solar all across the nation.

And, to give these cities additional assistance, the Department is going to provide on-site technical and policy expert assistance from our network of national laboratories to help them address their most pressing solar issues and opportunities.

The second announcement I want to make is of a funding solicitation aimed at colleges and universities.  Under the terms of the solicitation, we are asking our nation’s top scientists and engineers to join us in targeted materials science and process engineering research to accelerate near-term improvements in photovoltaic products and development processes that can be commercialized by 2010, just three years from now.  This solicitation will potentially fund up to $30 million in projects over 3 years because America’s universities are uniquely positioned to assist in transitioning photovoltaic technology from the lab to the early stages of market readiness.

And to those two, let me add a third, one I think will be of special interest to the venture capitalists in the room.  Today I am announcing that the Department of Energy will fund ten PV Module Incubator projects to up to $27 million.

These projects, with a minimum private cost share of 20 percent of total project costs – subject to appropriations by the Congress – could see up to $71 million in total research investment.  The primary objective of these projects is to address the challenges small businesses face moving pre-prototype and pre-commercial PV technologies into pilot and full-scale manufacturing at an accelerated pace.

What I am particularly excited about, however, is the way they are been structured.  Under the terms of the project, companies will receive funding from the Energy Department only upon the successful delivery of pre-specified samples of the new hardware they are developing.  Under this new approach, the Department is eliminating some of the planning paperwork and administrative reviews so that entrepreneurial companies can focus on what they do well: developing new technology.

I believe this new approach ensures the American taxpayer will receive real value in return for investment.  It also liberates the entrepreneurs involved from the burden of filling out forms and the need to develop an internal bureaucracy commensurate with the demands of the funding organization – in this case the Department of Energy - so that the focus can remain on the core business.  This is but one small example of what I mean when I say the best role for government is to support private initiatives, maintain a stable legal and regulatory environment and bring people together.

Ultimately, I believe, the transition to a more energy efficient U.S. economy will happen as a result of changes that arise largely from the private sector, in some cases with government support.  The marketplace can move faster than government, can accommodate and absorb breakthroughs in technology more quickly and, overall, has better access to information.

President Bush understands this, I understand this, and Andy Karsner, the Assistant Secretary of Energy for Energy Efficiency and Renewable Energy - who is speaking to you tomorrow – understands this.

We see it as our responsibility, as the Department of Energy’s responsibility, to develop policies and processes - and to sometimes lead with direct government investment or loan guarantees - that accelerate capital investment in leading edge technologies.

I think our record on this is pretty good, though it could always be better.

We have invested millions, even billions in research toward developing breakthroughs in solar and wind power, improvements in batteries for hybrid vehicles, the development of hydrogen fuel cells and a host of other energy technologies.  We want to see these technologies commercialized faster, and are willing to back up those words with assistance.

This is also an area, if I can be candid, where the Department of Energy has not performed up to the level I think it should.  We need to do a better job moving new technologies off the drawing board in our DOE national labs and to a place where they are market-ready.

It is important that we improve our performance quickly.  To do that, I have directed that the responsibility for technology transfer be put inside the Department’s Office of Science.  This will make it possible for us to follow projects forward from the idea stage to the development of prototypes by making the same people responsible for tech transfer and the work that goes on in our national labs.

It is our role to help bridge the gaps between laboratory researchers and inventors and venture capitalists and those with the capital strength to finance major projects.  Thank you.

Location:
Waldorf-Astoria, New York City, NY

Media contact(s):
Julie Ruggiero, (202) 586-4940