California legislators passed a bill in early September, Assembly Bill 8, that commits more than $2 billion for clean-vehicle incentives and $20 million a year for the construction of hydrogen fueling stations through the end of 2023.
Government officials believe the legislation will help push major automakers to build more hydrogen-powered vehicles, something that hasn't been successful in the past decade. Though California has already built nine hydrogen fueling stations, only 227 hydrogen vehicles exist within the state, according to the Los Angeles Times.
The California Fuel Cell Partnership said last year that California needed about 68 hydrogen fueling stations to entice automakers to begin the production of hydrogen fuel vehicles. However the state is going beyond those boundaries with the funding from this new bill. California plans to build at least 100 of these publically accessible stations.
That's not the only instance of the state spending beyond excess for clean energy projects. The state has a goal to reduce emissions to 1990 levels by 2020—down to 427 million metric tons of carbon dioxide—and it doesn’t appear to be sparing any expense to get there.
Over the past couple of years the state has cut expenses by millions for education, health services, law enforcement, foster care and more. But one thing noticeably off the list is California's renewable energy program, which spent a whopping $1.6 billion last year alone on alternative energy and energy-efficiency projects. In fact, instead of cutbacks, the program is only expected to grow.
But public scrutiny is growing too. Some of California's energy investments have gone belly up, many believe that consumer fees that fund the programs are illegal and the state now has the highest electricity rates in the continental U.S., an average of 16.2 cents per kilowatt hour, leaving many to question if the benefits of the programs outweigh the high price tag.
So far the state has spent about $15 billion on its campaigns for increased energy efficiency and alternative energy programs over the past decade. But are these programs paying off?
Perhaps not. State Senator Rod Wright, a member of the Energy, Utilities and Communications Committee told the Los Angeles Times that with the program "there are literally hundreds of millions of dollars going into investments that produce marginal benefits."
The largest funded program, about $1 billion per year, is for subsidies on energy-efficient equipment such as solar panels, refrigerators or efficient swimming pool pumps. The program also covers subsidies for industrial and commercial products too.
Bloom Energy Corp., a hydrogen fuel cell firm, was one of the companies awarded money for subsidies. It received $280 million in funds from the California Public Utilities Commission's Self-Generation Incentive Program. Along with big tax breaks, these subsidies allowed Bloom to sell fuel cells to clients at a deep discount. The program was eventually suspended.
Another $7 million was awarded to DyoCore Inc. to subsidize the cost of wind turbines. But the company submitted false information claiming the turbines generated much more clean power than they actually could.
In 2012 additional spending was dispersed among three categories. California spent about $44 million for clean energy research grants, $250 million on advanced transportation projects and $317 million on renewable energy developments.
The California Public Utilities Commission estimates that the fees associated with some of these energy-efficient projects have added about $24 annually to every consumer's electricity bill, on top of their already sky-high rates. But California's green energy programs are funded through all kinds of taxes, beyond those tacked on to electricity bills. The new hydrogen fuel stations, for example, will be funded through a $3 fee on license plates.
Though a lot can be said for the importance of growing the clean energy sector in America, many California residents might wonder at what cost?