Officials of companies involved in solar and carbon capture technologies told the House Select Committee on Energy Independence and Global Warming that their biggest challenge to creating new green technologies was financing, not the science.
"Using proven technology available today, we can produce electricity along with other basic commodities at market prices while sequestering 90 percent of our CO2 (carbon dioxide)," said Frank Smith, chief executive of PurGen One.
His plant chemically converts coal into a synthetic gas and then removes the pollutants and 90 percent of the carbon from the gas, leaving nearly pure hydrogen. The hydrogen is used to produce energy while demand is high, but can alternately be used to produce urea fertilizer, which is sold and adds to profits when electricity demand is minimal.
"The new technology here is in the business model," Smith said. "Everything else is off-the-shelf, proven technology."
But the huge capital costs, coupled with the lack of an established track record, make finding debt financing for new facilities nearly impossible, Smith said.
"Big power plants are hard to finance in the best of times," he added.
Tessera Solar is embarking on a form of solar technology that uses heat from the sun to create energy that's converted into electricity. The company's method emits no greenhouse gases, uses less water than other solar technologies and has high electric efficiency.
But its vice president of marketing and regulatory affairs, Sean Gallagher, said financing could halt deploying this technology.
"It's been six months already since the stimulus package was passed, and we still don't have the loan guarantee guidelines," Gallagher said of the Energy Department's program to fund clean energy projects.
Gallagher urged the department to issue regulations consistent with commercial banking practices and move swiftly to start the next round of solicitations for the program.
Loan guarantees and other financial impetus from the federal government will be critical to getting new green technology projects off the ground, given the current financial situation, panelists said.
"If it weren't for the financial crisis, that would be of less emphasis," Smith said.
First movers, or those first to commit to a new technology, are now facing bankers more afraid of suffering losses, and that fear is making investment from the private sector scant.
Smith told lawmakers reliance on federal funds will not always be necessary. "We're talking about how to get started," he said.