Clean Energy Manufacturers Eligible for $2.3B in Recovery Act Tax Credits

Qualifying manufacturers will produce solar, wind, and geothermal energy equipment; fuel cells, microturbines, and batteries; electric cars; electric grids to support the transmission of renewable energy; energy conservation technologies; and equipment that captures and sequesters carbon dioxide or reduces greenhouse gas emissions.

Energy Secretary Steven Chu said, "These tax credits will help create thousands of high quality manufacturing jobs in some of the highest growth segments of the economy. This is an opportunity to develop our global leadership in clean energy manufacturing and build a secure, sustained base of jobs for America's workers."

Authorized by the American Recovery and Reinvestment Act, this new program will provide tax credits to manufacturers who produce clean energy equipment.

Treasury Secretary Tim Geithner said, "This partnership between Treasury and Energy adds an important new dimension to the incentives created in the Recovery Act to increase U.S. manufacturing output, improve energy efficiency, and develop alternative sources of energy."

The Recovery Act created a new tax credit program by authorizing Treasury to provide developers with an investment tax credit of 30 percent for facilities that manufacture particular types of energy equipment.

The manufacturing tax credit is capped at $2.3 billion, and credits are available for two years or until the cap is reached.

The announcement of the manufacturing tax credit is the next step in a new partnership between the Departments of Treasury and Energy aimed at promoting energy production and energy independence.

Tax programs have provided successful incentives for encouraging the development of renewable energy in the past - in 2006 alone, approximately $550 million in renewable energy tax credits were provided to 450 businesses.

In July, Treasury and Energy announced the availability of a payment in lieu of tax credits for facilities that produce renewable energy, a program that is expected to result in more than $3 billion of stimulus for energy development in rural and urban communities.

Companies can expect to receive payments within 180 days of filing for the credit. To view the program summary and guidance for applying for the tax credit, please visit the Advanced Energy Manufacturing Tax Credit (48C) page.

World-wide, Schott Solar is one of only two manufacturers of receivers for concentrated solar power parabolic trough technology. Schott opened a factory in sunny Albuquerque, New Mexico in 2009.

Solar Energy Industries Association President and CEO Rhone Resch said the tax credit will put America back on track for global leadership in solar manufacturing.

"This program will attract billions of dollars of investment in manufacturing facilities in the U.S. and will create new jobs in states where they are needed most," said Resch.

"We expect solar-related provisions in the stimulus bill like this one to create 110,000 jobs in the solar industry in 2009 and 2010 combined," he said. "This news is especially welcome as unemployment hovers near 10 percent nationally."

Resch pointed to new solar manufacturing facilities built in the past year across the country as evidence of the growth potential of the solar industry. "From the Schott Solar plant in New Mexico and Sharp Solar's facility expansion in Tennessee to SolarWorld's new facility in Oregon and Dow Corning in Michigan, the solar industry has the capability of creating good jobs across the nation," he said.

Schott Solar’s Albuquerque facility is the first new solar manufacturing facility to open since the federal government signed the American Recovery and Reinvestment Act into law. The 200,000 square-foot factory produces photovoltaic modules and receivers for concentrated solar power applications.

The Schott factory has put more than 300 people to work and represents an initial investment of over $100 million in the Albuquerque region by the global Schott Solar group, based in Germany. Long-term plans call for investment to grow to $500 million and workforce to expand to 1,500, the company says.

This announcement was one of four clean energy and energy efficiency funding announcements the Obama administration made this week.

On Thursday, Secretary Chu said the Department of Energy is providing more than $66 million in Recovery Act funding to expand weatherization assistance programs in Alaska, Colorado, Connecticut and Hawaii.

The funding, along with additional funds to be disbursed after the states meet certain Recovery Act milestones, will help these states weatherize about 26,300 homes, lowering energy costs for low-income families, reducing pollution, and creating green jobs.

Also Thursday, Secretary Chu announced up to $13.6 million in multi-year funding for new clean energy projects on tribal lands. Thirty-six Native American tribes and Alaska villages have been selected to receive awards that will advance renewable energy technologies and energy efficiency and conservation projects.

"These projects will create jobs and economic opportunities on tribal lands, while protecting our planet and reducing our dependence on foreign oil," said Chu.

In Alaska, many rural Native villages pay high retail fuel prices to meet basic survival needs. Heating oil and diesel fuel is expensive and so are the costs of transportation and storage.

The Energy Department selected the 36 projects through a competitive process and will provide financial assistance to the tribes for weatherization training, feasibility studies, deployment of renewable energy and energy efficiency measures. The federal funding is expected to be matched by up to $27 million in public and private investment, for a total value of up to $41 million.

And today, Secretary Chu announced more than $119 million in Recovery Act funding to support energy efficiency and renewable energy projects in Alabama, American Samoa, the District of Columbia, Illinois, Maryland, North Dakota, and Wyoming.

"This funding will provide an important boost for state economies, help to put Americans back to work, and move us toward energy independence," said Chu. "It reflects our commitment to support innovative state and local strategies to promote energy efficiency and renewable energy while insisting that taxpayer dollars be spent responsibly."

Copyright Environment News Service, ENS, 2009. All rights reserved.