At a Middle Class Task Force meeting today which focused on manufacturing, Vice President Biden announced the Administration’s support for up to $5 billion in additional funding for a successful Recovery Act program that will accelerate job growth in Clean Energy Manufacturing. This increase would more than triple the funding of the Recovery Act’s Section 48C Advanced Energy Manufacturing Tax Credit.
“American manufacturing plays a vital role in our society and economy. It was instrumental in building our middle class and we must work with the industry to retool to remain competitive for the economy of the future,” said Vice President Biden. “We have to jumpstart growth in green manufacturing – and part of that is encouraging companies to build the components of green technology right here on American soil. By combining the most talented workforce, the most entrepreneurial businesses, the best universities in the world with seed capital from government investment, we can once again produce cutting-edge technology that creates 21st century jobs here in America.”
This announcement builds on the job creation ideas that the President discussed last week. As he highlighted in a major speech on job creation, there are a select set of Recovery Act clean energy programs that are substantially oversubscribed and can be leveraged to help accelerate job growth. Providing tax incentives for investing in renewable energy manufacturing facilities in the U.S. is a particularly promising way to create jobs quickly, leverage private investment, and continue America’s emerging leadership in making the clean energy products of the future.
The Advanced Energy Manufacturing Tax Credit
Clean energy markets have been growing rapidly in the U.S. and around the world. As part of his historic Recovery Act commitment, the President set a goal of doubling America’s generation of renewable energy in the next three years. Along with the President’s commitment to reducing our dependence on oil, this will create new demand for a wide array of new products. These expansions create an opportunity, but also an imperative to ensure that American manufacturers lead in making the wind turbines, solar panels, electric vehicles, batteries, and other products that will make these transformations possible.
The Section 48C Advanced Energy Manufacturing Tax Credit was designed to help America seize this opportunity. It supports the building and equipping of new, expanded, or re-tooled factories that manufacture the products needed to power the green economy. The program covers a wide array of clean energy technologies, including wind, solar, batteries, energy efficiency, advanced transportation, and advanced energy transmission. It provides a 30% tax credit for investments in factories that manufacture these products.
Success has Created an Opportunity for Near-term Job Creation
The Recovery Act included $2.3 billion in tax credits that will support an additional $5.4 billion in private capital investment. Yet the program generated far more interest than anticipated. DOE and Treasury received far more technically acceptable applications as the program has resources to fund. Instead of turning down worthy applicants who are willing to invest private resources to build and equip factories that manufacture clean energy products in America, the Administration supports expanding the program.
An additional $5 billion would support at least $15 billion in total capital investment, creating tens of thousands of new construction and manufacturing jobs. Because there is already an existing pipeline of worthy projects and substantial interest in this area, these funds will be deployed quickly to create jobs and support economic activity. In doing so, the Administration will employ new approaches to ensure that we maximize private investment for every dollar we invest.