Netflix earnings Sundance Film Festival 2022 Google will set up blockchain unit Amazon opening a brick-and-mortar clothing store Free COVID-19 test kits Wordle explained

Obama commits $1.2. billion in energy R&D

President Obama on Monday cheers on green-tech businesses, announcing a big increase in energy-related research and a 10-year business tax credit for R&D spending.

Updated at 12:55 p.m. PDT with comments from Foundation Capital. Updated at 3:45 a.m. PDT March 24 with corrected figure for total government investment in clean energy and efficiency.

Seeking to boost the U.S. clean-energy industry, President Obama on Monday announced $1.2 billion for science research at national labs and a proposal to extend a business tax credit for investments in research and development.

At an event at the White House, Obama told researchers and green-technology business people that their work was vital to revitalizing the U.S. economy and cutting the country's dependence on foreign oil. About 120 researchers, lab directors, and CEOs from energy technology companies attended the event.

President Barack Obama at the White House speaking to researchers and clean-technology company CEOs. Screen capture by Martin LaMonica/CNET

"We need some inventiveness. Your country needs you to mount a historical effort to end, once and for all, our dependence on foreign oil," Obama said. "Your country will support you, and your president will support you."

Obama said that his administration's budget proposes a 10-year extension to a tax credit for businesses that make investments in research and development. This tax credit has been in place in the past, but lacked a long-term commitment from the federal government, he said.

For every dollar that the government spends on this tax credit, it delivers two dollars to the economy, Obama said.

Obama also announced the availability of $1.2 billion in basic research at the Department of Energy's national laboratories. In addition to money to upgrade facilities at national labs, grants are available for research in renewable energy, such as solar power and biofuels, as well as in nuclear energy, underground storage of carbon dioxide, and hydrogen.

The stimulus package calls for an additional $371 million in research, which officials have not yet approved, according to the DOE.

Obama said that through the stimulus package, the federal government has set aside $59 billion in direct spending and in tax incentives to promote clean energy and energy efficiency. That investment will lead to 3.5 million jobs, 90 percent of which will be created in the private sector, he said.

During his talk, he singled out a few companies for their innovations and contributions to creating jobs.

Among them was Serious Materials, which makes energy-efficient windows and drywall that uses 80 percent less energy to produce than gypsum. Earlier this month, the California-based company reopened a window factory in Pennsylvania that had closed, resulting in 100 lost jobs.

The research and development investment tax credit is a "crucial tool" for green-technology businesses, said Paul Holland, a venture capitalists at Foundation Capital, which invested in Serious Materials and many other green-tech start-ups.

Many successful tech companies, like Intel and Netflix, would "not be where they are today if it were not for the progressive policies, such as the federal R&D tax credit and the stimulus plan," Holland said.

In an interview, Holland said the federal government needs to play a role in the financing "food chain" for green-tech start-ups that need capital to expand.

"The middle tier of finance--the private equity firms, which were pretty vital to clean tech have been decimated over the last couple of years," he said. "The federal government has become the provider of last resort in that part of the food chain."

On Friday, the Department of Energy said it expects to provide a $535 million loan guarantee to solar start-up Solyndra, the first loan done by the DOE in four years.

Another speaker at the event was Susan Hockfield, the president of the Massachusetts Institute of Technology, where researchers have created a number of energy-related innovations over the past few years, such as fast-charging battery technology and more efficient solar energy conversion.

She lauded the Obama administration's commitment to clean energy, saying the investments in research are comparable to the jolt of technology development that occurred during the space race in the 1960s.

"(The research and development tax credits) offer the only route to the breakthroughs we need to address energy security, rapidly increasing energy demand, and climate change," Hockfield said.

Holland said that the clean-tech industry has shown it can effectively spin out companies from research universities or national labs.

"I think this is just a different time," he said. "The focus in Washington is on invention, innovation, getting jobs, and getting various pieces of the clean-tech industry more competitive for the long term."