Included in the economic recovery bill were a number of Chairman Bingaman’s priorities. One in particular was his clean-tech manufacturing credit. The provision would establish a 30 percent investment tax credit to start to address problems faced by a stressed domestic renewable energy industry. The credit also is intended to help stimulate America’s economy by making the United States a more attractive location for manufacturers of solar, wind and other green technologies. This $2.3 billion investment in clean energy will pay significant dividends in the form of “green jobs,” bulking up America’s industrial base and boosting the production of homegrown renewable energy.
“Domestic demand for renewable energy technologies has grown rapidly over the past few years, and we anticipate even faster growth in the immediate future,” Sen. Bingaman (D-NM) noted. “We know that the right incentives will bring vital manufacturing to American soil. When enacted, it will put our country in a much better position to capture the economic potential associated with growing demand for technologies that harness renewable energy resources.”
Under the law, the Treasury Secretary, in consultation with the Energy Secretary, must establish a program to consider and the $2 billion in tax credits. This manufacturing credit – the first U.S. tax credit specifically intended to attract clean-tech manufacturers to American soil – would not have been included in the conference report without strong allies on House Ways & Means Committee. The leader of the effort was Congressman Mike Thompson (D-CA).
“We need to stimulate the economy for green energy, not just at the consumer level but also at the manufacturing level so that we keep good jobs here at home,” said Congressman Thompson (D-CA). “America must be able to compete on a global scale when it comes to manufacturing energy efficient technology, so that we aren’t exporting our technological innovations to other countries. Today, for example, because of steep tax incentives in other countries, almost 90% of solar panels are manufactured outside of the United States. By offering incentives for manufacturers of solar panels, windmills, and other green energy technologies we can level the playing field for American innovators, create jobs, and move our economy forward.”
While the manufacturing credit tops this release, there are other items worth noting. Also credit Bingaman for:
· Three-year extension of Production Tax Credit. This is a very significant extension. Recall that last year, it took nine votes to enact a one-year extension of wind and two-year extension for other resources.
· Removal of caps on residential solar water heaters. Last October, Congress removed the cap on solar electric property. This provision removes the cap – currently $2,000 – on the 30% credit for solar water heating property. Additionally, the bill removes the caps on the 30% credits for geothermal heat pumps (currently $2,000) and small wind energy property (currently $500 per ½ kW capacity with a ceiling of $4,000).
· Eliminates a law that reduces Federal tax credits for property that benefits from Federal, state or local financing. This is important because it will incentivize forward-looking states, like New Mexico, to maintain and establish clean energy financing programs.
· $6.3 billion for Energy Efficiency and Conservation Grants to States. Many states and local governments have created dedicated clean energy programs and are implementing effective strategies to support significant new project and market deployment. Facing budget shortfalls, however, states and local governments now lack sufficient financial resources to tap the full potential of clean energy development and deployment. This situation is exacerbated with private sector financing drying up as a result of the recent credit crisis. With funding from the recovery plan, states and local governments will be able to quickly accelerate clean energy development and create jobs.
· $6 billion for new loan guarantees aimed at renewable projects such as wind or solar projects and for electricity transmission projects.
· $5 billion to increase Low-Income Weatherization funding. Across the nation, millions of working families spend a significant portion of their income to run their furnaces, air conditioners and keep the lights on. By upgrading a home’s furnace, sealing leaky ducts, fixing windows, and adding insulation we can cut energy bills by up to $350 per year. And by adding energy efficient appliances and lighting the savings are even greater. The critical funding in the recovery package will help weatherize over 1 million homes.
· $4.5 billion to increase energy efficiency of Federal buildings. The Federal government is the largest energy consumer in the world. Making substantial investments to reduce energy consumption through efficiency upgrades to Federal buildings can spur job creation while slashing the government’s energy bill by 25 percent.
· $3.4 billion for Fossil Energy research and development.
· $2.5 billion for energy efficiency and renewable energy research.
· $2 billion for Science at Department of Energy, including $400 million for the Advanced Research Projects Agency - Energy.
· $2 billion in grant funding for the manufacturing of advanced batteries systems and components and vehicle batteries that are produced in the .
· $1 billion for other energy efficiency programs, including alternative fuel trucks and buses, transportation charging infrastructure, and smart and energy efficient appliances.
· $1 billion for the Bureau of Reclamation to provide clean, reliable drinking water to rural areas and to ensure adequate water supply to Western localities impacted by drought.
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