$150 Million Tax Credit Available for Clean Energy Companies
The U.S. Department of Energy (DOE) and the U.S. Treasury recently announced that $150 million is available for the Advanced Energy Manufacturing Tax Credits. As part of President Obama’s all-of-the-above plan to strengthen the country’s energy, this program will encourage manufacturers to begin investing in more energy efficient procedures. It will also support the nation’s energy security as well as the creation of new jobs for hard-working Americans.
In 2009, the American Recovery and Reinvestment Act incorporated a similar tax credit for manufacturing facilities, known as the Section 48C Advanced Manufacturing Tax Credit. It provided $2.3 billion to 183 projects across the U.S. Some facilities failed to use the full amount awarded to them, which resulted in the creation of the current $150 million available tax credit.
Previous Energy Secretary Steven Chu shared his thoughts on the tax credit,
Since 2009, the Advanced Energy Manufacturing Tax Credit program has supported innovative American manufacturers that boost our nation’s competitiveness in the global race for clean energy. These new investments will continue that momentum, supporting the President’s commitment to American-made energy, increasing energy security, and creating jobs.
Obtaining part of the $150 million will be competitive. According to the tax credit fact sheet, the DOE will assess projects based on “commercial viability, domestic job creation, technical innovation, speed to project completion, and potential for reducing air pollution and greenhouse gas emissions. The DOE will also consider additional factors including diversity of geography, technology, and project size, and regional economic development.”
The tax credit fact sheet also states that eligible manufacturing facilities should possess energy products which may include:
- Solar, wind, geothermal, or other renewable energy equipment
- Electric grids and storage for renewables
- Fuel cells and microturbines
- Energy storage systems for electric or hybrid vehicles
- Carbon dioxide capture and sequestration equipment
- Equipment for refining or blending renewable fuels
- Equipment for energy conservation, including lighting and smart grid technologies
- Other advanced energy property designed to reduce greenhouse gas emissions may also be eligible as determined by the Secretary of the Treasury
The application process for certification will run from February 7 until July 23, 2013. Once a facility goes through the extensive review process, the IRS will either accept or reject the application by November 15. More information on how to apply for this tax credit can be found at the U.S. Department of Energy or the IRS.
Recent years have made the U.S. a leader in the worldwide race for clean energy as it has more than doubled the amount of renewable energy sources. Simultaneously, the manufacturing industry has improved with roughly 500,000 new jobs added since 2010. This tax credit will continue to lead the U.S. in the direction of enhanced energy security and economic improvements. For additional ways to achieve energy efficiency, consider participating in a demand response program or upgrading your facility’s lighting. Whichever method you choose, energy reduction strategies will not only assist your facility in the application process for this tax credit, but as an added benefit, they will surely help in lowering overall energy costs as well.
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