Environmental Leader

President Obama has awarded $2.3 billion in tax credits for clean energy manufacturing projects across the United States. Targeted at 183 projects in 43 states, the Recovery Act Advanced Energy Manufacturing Tax Credits program is expected to create 17,000 U.S. manufacturing jobs.

The Section 48C program will provide a 30 percent tax credit for investments in manufacturing facilities that produce clean energy products including solar, wind, energy efficiency and energy management technologies. The investment tax credits will also leverage private capital for a total investment of nearly $7.7 billion in high-tech manufacturing in the United States, according to the DOE.

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.

This effort, along with other Recovery Act investments, will drive significant growth in the renewable energy and clean technology manufacturing sectors, according to the DOE.

Projects selected address a broad spectrum of manufacturing capabilities and technologies needed to support a clean energy economy including smart grid, building efficiency and energy management, solar energy and wind energy.

As an example, Itron Inc. plans to expand its manufacturing capacity at its South Carolina facility to boost annual production of its OpenWay CENTRON smart meters to four million units. The manufacturer estimates that one year’s production of the meters will reduce electricity use by approximately 1.7 million MWh per year.

Click here (XLS) for a complete list of projects. About 30 percent of the projects will be completed by 2010, although projects selected for this tax credit must be placed in service by 2014. For more information about the tax credits, visit www.energy.gov/news2009/8503.htm.

Last year, the Administration awarded funding for a variety of clean-tech projects including clean energy research at small businesses, industrial energy-efficiency projects, and geothermal research and development. In addition, more businesses should be able to take advantage of property tax financing to fund installation of renewable energy, as well as energy efficiency retrofits, through the Recovery Through Retrofit program announced in October last year.

Clean-tech associations are welcoming the news, but also believe more must be done to support the industry.

A recent report from Bruegel and Harvard economists finds that policymakers need to encourage innovation and investments in “green” research and development through subsidies.

While the American Wind Energy Association (AWEA) welcomes the administration’s announcement of $2.3 billion in tax credits for clean-energy manufacturing and President Obama’s call for an additional $5 billion credits, AWEA CEO Denise Bode also stated “the industry is still vulnerable to the impacts of on-again off-again tax credit policies. A Renewable Electricity Standard (RES) with strong, aggressive near-term targets is the best way to provide the certainty needed for companies to expand domestic wind manufacturing.”

Katherine Hamilton, President of GridWise Alliance, also believes the announcement is an important step in bolstering the U.S. clean technology manufacturing base. “The GridWise Alliance and our member companies are excited to work hand in hand with this Administration to grow the green jobs economy, reduce our dependence on foreign sources of energy, and allow the smart grid to be the platform for our sustainable energy future,” Hamilton said in a statement.