Bingaman Calls for National Strategy to Support Clean Tech

May 10, 2010
New Mexico senator cites linkage between R&D and manufacturing in clean energy and warns that competing nations are closing gap on U.S.

When Jeff Bingaman looks at a pie chart detailing production of lithium-ion battery manufacturing, the Democratic senator from New Mexico winces. He already knows the numbers too well.

Japan accounts for 46% of world production, while South Korea and China have taken on increasing slices of the development and manufacturing. Where is the United States? Producing just 1% of what is seen as one of the most key technologies in the world today -- far less than even Taiwan.

Bingaman, chairman of the committee on energy and natural resources, sees what has happened to the production of lithium-ion batteries and fears the same trend is occurring in other key technologies, with the potential of being frozen out of the advancement and production of clean energy.

"There is a widening clean tech gap between the United States and other countries," he says. "The U.S. has traditionally enjoyed a significant competitive advantage in research, development and innovation, and we have treated our research leadership as equaling economic dominance in the related technologies. But, as evidenced by the [photovoltaic solar], battery and nuclear industries -- each, a technology invented and developed in the U.S. -- this model no longer holds."

Bingaman has emerged as one of the most outspoken voices in elected government in the U.S. on the issue of technology innovation and the future of manufacturing. The U.S., he says, no longer has a monopoly even on breakthrough technology anymore and warns that other nations are investing heavily in research and development and many of their educational systems are closing the innovation gap.

"A new model is emerging whereby manufacturing, R&D and innovation are increasingly interlinked -- and this is especially true in clean tech," he says.

Bingaman has for several years called for a comprehensive national strategy that supports the domestic production of clean energy technologies for domestic use, with a heavy emphasis on research and innovation, domestic manufacturing capacity, and the development of domestic markets.

"Regardless of the funding mechanism, it is imperative that we put in place a research and funding strategy that will ensure that efforts are consistent and sustainable over the long term to nurture the breakthrough technologies that we need," he says.

In the area of U.S. manufacturing in clean technologies, Bingaman says one of the inherent problems has been government incentives and tax credits for renewable energy technologies were concentrated downstream at the commercial and individual consumer level. Most of these measures, he points out, were short-term in nature, creating "government-driven boom-bust cycles" and were not effective.

In 2009, however, the economic stimulus package passed by Congress created two key programs, the clean energy manufacturing tax credit and Section 1603, which allows grants for renewable projects. These programs, says Bingaman, were instrumental to spurring the solar and wind industry's growth.

"These credits for the first time [creates incentives for] companies to manufacture clean energy technologies in the United States by allowing them to write off 30% of the cost of creating, expanding or re-equipping their facilities," he says.

The clean energy manufacturing tax credit was funded at $2.3 billion last year, but was exhausted within a matter of months, leveraging nearly $7.7 billion for 183 cleantech manufacturing projects in 43 states.

"That's a powerful demonstration of the potential for clean energy manufacturing in our country," says Bingaman. "I've proposed expanding this credit and President Obama has endorsed this expansion, calling for an additional $5 billion for the 2011 budget."

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