Five U.S. Senators have introduced new legislation that would expand and improve the Advanced Energy Manufacturing Tax Credit (48C) program. Authored by U.S. Sen. Sherrod Brown (D-OH) and cosponsored by Sens. Charles Schumer (D-NY), Jeff Merkley (D-OR), Bob Casey (D-PA), and Kay Hagan (D-NC), the Security in Energy and Manufacturing (SEAM) Act would promote more domestic manufacturing of clean energy technology.
"To create the millions of new jobs required to make the American economy work for middle class families, we need to make things in America again," Merkley said. "The SEAM Act will help ensure that new clean energy technologies are developed here in America instead of overseas and reenergize the American manufacturing sector."
The Advanced Energy Manufacturing Tax Credit (48C) provides a 30% credit for domestic companies for investments in new, expanded, or reequipped clean energy manufacturing projects. The program is aimed at building capacity to meet this new and growing source of demand. Qualifying facilities manufacture a wide range of clean energy products, including wind turbines, solar panels, hybrid vehicle systems, carbon capture and sequestration systems, and biofuel refinery components, among others.
"The Advanced Energy Manufacturing Tax Credit is aimed at manufacturers that are retooling for the clean energy economy, and are creating jobs here in the United States," said David Foster, Executive Director of the Blue Green Alliance. The clean energy industry is forecasted at over $2 trillion annually.
Through "48C" in the Recovery Act, $2.3 billion in federal funds leveraged more than $5.4 billion of private investment that supports the creation of manufacturing jobs. The funds distributed through the first wave of funding are estimated to create 17,000 jobs, plus an additional 41,000 jobs through matching private investment.
The Security in Energy and Manufacturing (SEAM) Act would extend the program and allow for grants in lieu of tax credits. This would enable the program to reach additional companies that would otherwise be unable to utilize the program new companies that do not yet have tax liabilities or companies that struggle to find credit in todays tight financial market. Without a grant, this program is unusable for many would-be manufacturers.
Both the tax credit and grant would remain at 30% of the cost of the project. The SEAM Act also adjusts the selection criteria to give higher priority to facilities that manufacture rather than assemble -- goods and components in the U.S.
While the initial tax credit has supported 183 projects in 43 states, hundreds more eligible projects applied for funding and were denied due to a lack of funds. The Department of Energy (DOE) states that the program was more than three times oversubscribed. DOE deemed 418 projects eligible, which amounts to $5.8 billion in unfunded eligible applications. These manufacturers are waiting in the pipeline, and would be ready to break ground soon after they receive funding.
The SEAM Act has been endorsed by the Great Lakes Wind Network, United Steelworkers, National Resources Defense Council, Center for American Progress, Solar Energy Industries Association (SEIA), and AFL-CIO. Companion legislation has been introduced in the U.S. House of Representatives by Rep. Phil Hare (D-IL).