DOE, Treasury launch latest U.S. Recovery Act cleantech assistance—$2.3B manufacturing tax credit

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The latest tranche of American Recovery and Reinvestment Act assistance for the solar and renewable energy sector targets the production sector–a $2.3 billion tax credit program, sponsored by the Treasury and Energy departments, for U.S. manufacturers of clean energy equipment and devices. Preliminary applications for the program are due on Sept. 16.

The news follows the announcement last month by the departmental partners of the availability of a payment in lieu of tax credits for facilities that produce renewable energy, a program that is expected to result in more than $3 billion of stimulus for energy development.

The new program authorizes Treasury to provide developers with an investment tax credit of 30% for facilities that manufacture particular types of energy equipment, including qualified companies that will produce solar, wind, carbon capture, fuel cells, and other kinds of cleantech gear. The credits are meant to support new, expanded, or re-equipped domestic production facilities, not energy generation projects.

Capped at $2.3 billion, and the manufacturing tax credits are available for two years or until the cap is reached, with subsequent allocations dependent on remaining funds. Almost $7.7 billion of capital investments in new renewable and advanced energy manufacturing projects could result from the stimulus effect of the new tax credits, according to the sponsors.  

DOE and the Internal Revenue Service will review and make determinations on the eligibility and merit of manufacturing tax credit applications. 

Applicants will get tax credits based on the expected commercial viability of their project and the ranking of their project relative to other projects, with rankings based on such factors as expected job creation, reduction of air pollutants and greenhouse gas emissions, technological innovation, and ability to have the project up and running quickly. Technology, geographic and project size diversity, and regional economic development will also be considered when rating projects, according to DOE.

Preliminary applications are due to DOE Sept. 16, with final applications due to DOE and IRS on Oct. 16.  By Jan. 15, 2010, IRS will certify or reject applications and notify the certified projects with the approved amount of their tax credit.  Awardees will then receive acceptance agreements from IRS by April 16, 2010. 

To check out the program summary and guidance for applying for the tax credit, go to DOE’s Advanced Energy Manufacturing Tax Credit (48C)  page.

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