Pennsylvania handed out $21.2 million in grants this week to support alternative energy, with the funding going to 54 companies and groups in the state for the development, as well as adoption, of cleantech.

About half of the funding is going out under the Alternative Fuels Incentive Grant, announced today, with the other half of the cash is coming from the Pennsylvania Energy Development Agency.

Another $10 million in grants is also on the way under the Energy Harvest program, which covers technologies that are commercially available, but Pennsylvania Gov. Ed Rendell wants to encourage even more alternative energy in his state.

"His strategy would create an $850 million Energy Independence Fund that is pegged to many different uses," Charlie Young, spokesman for the Pennsylvania Department of Environmental Protection, told Cleantech.com.

"$500 million would be for deployment of clean energy projects, possibly including biofuels, and $106 million would be for venture funding for startup companies in the clean energy sector."

Another $244 million would go toward rebates for homeowners and business owners for solar panels, as well as some production incentives for solar manufacturers.

The proposed fund, which is currently being hashed out by a special session of the Pennsylvania legislature, would be capitalized by a systems benefits charge on consumer's utility bills. 

Rendell is competing with California, the most populous state in the union, which he said has made more than $3 billion available for solar development, as well as tiny Rhode Island, which he said has put up $300 million for renewable energy programs.

Check out Gov. Rendell filling up on biofuel >> 

But even without the proposed fund, Pennsylvania is attracting its fair share of cleantech companies, including Spanish wind developer Gamesa, which set up shop in Philadelphia in 2004.

"They came here to establish their North American headquarters, and have four plants operating now," said Young. "That really put us on the map."

"And we attracted other leading international energy companies, Iberdrola and Conergy, as well as Axion."

Under Rendell, the state initiated an Alternative Energy Portfolio Standard, called a Renewable Portfolio Standard in many other states. Young said it's called Alternative because there are two tiers.

"It's not strictly traditional renewables, such as solar and wind and hydro that are in the first tier, but also things that have a net environmental benefit to Pennsylvania, such as waste coal," he said.

"That's one of our leading environmental problems, cleaning up waste coal piles and the damage they do, particularly to our streams."

Under the portfolio standard, 18 percent of the state's energy sold at retail will come from clean alternative sources by 2021.

The cash awarded this week includes $11.2 million from the Pennsylvania Energy Development Agency, which awarded $410,250 to Energy Works North America for a poultry litter gasification project.

Another $600,000 is going to PFBC Environmental Energy South Park Technology, in partnership with Consol Energy and Sargas, to develop pressurized, fluidized-bed combined cycle technology to use wet waste coal for efficient power generation with reduced carbon dioxide emissions.

The agency's grants also went to AE Polysilicon, Separation Design Group, Wind Tower Systems and others.

The $10 million in Alternative Fuels Incentive Grants include a $350,000 production incentive for Pittsburgh's United Oil for 7 million gallons of biodiesel over the next two years. United Oil was Pennsylvania's first commercial biodiesel producer.

Other biofuel grants recipients include the Port Authority of Allegheny County, PA Biofuels, Alternative Fuels, All American Plazas and the Biotechnology Foundation at Thomas Jefferson University.

The foundation is getting $1 million to support the research of engineering tobacco plants for the production of biodiesel and ethanol.

Pennsylvania is aiming to produce and consume 1 billion gallons of biofuel in the state by 2017, under the Energy Independence strategy proposed in February.

"One of the interesting things with Pennsylvania is we are within hours drive of, I think it's 54 percent of the U.S. population," said Young. "That corridor from Richmond up to Boston is our market for alternative fuels."