Last week, the U.S. Energy and Treasury Departments launched a tax credit program for renewable energy equipment manufacturing. The $2.3 billion for the program comes from the American Recovery and Reinvestment Act (ARRA), better known as the stimulus. The tax credits will offset 30 percent of the cost of setting up factories domestically.
There are critics who think it is foolish to compete against China. “Setting up a plant in an oversupplied market is just not a very sensible thing to do,” said Jenny Chase, a lead solar analyst for the British research group New Energy Finance. Chase think that it would be better to “accept that we’re going to buy cheap panels from China, then make jobs in putting them up.”
However, there are many who disagree with Chase. Alain Harrus, a partner with CrossLink, an investor in SoloPower who is planning new factories in the U.S., said, “We don’t want to miss the market window.”
One of Chase’s colleagues, Michael Liebreich, the chief executive of New Energy Finance, said that the cost of labor will go down as solar manufacturing becomes more automated. When manufacturing costs decrease, transportation costs will increase, Liebreich said. “Once solar looks like glass — we don’t import glass for buildings from China,” he said. “We make them near the market.”
The IMPACT Act
Over 50 percent of wind turbine parts are imported despite the fact that Midwest “is one of the best places in the world to produce electricity from wind,” as a CNN reporter put it last May. Senator Sherrod Brown (D-OH) wants that to change. In June, he introduced a piece of legislation called the Investments for Manufacturing Progress and Clean Technology (IMPACT) Act which would ensure new clean energy jobs stay in U.S. and encourage clean energy manufacturing in the U.S.
The IMPACT Act would create a $30 billion manufacturing revolving loan fund that would provide “liquidity for domestic firms to become more energy efficient, retool facilities, and retrain workers to produce clean energy products,” according to Apollo Alliance. Apollo Alliance estimates that IMPACT Act will create over $100 billion in revenue for clean energy businesses and create 680,000 direct manufacturing jobs, and almost two million indirect jobs over five years.
“We can revive American manufacturing through investment in clean energy,” said Senator Brown. “This bill will help our manufacturers retool, put our auto suppliers back to work, and produce clean energy technologies.”
Michael Peck, director of media, institutional and labor relations for Gamesa North America, said, “Gamesa is proof of how wise green economy policies like the IMPACT Act can drive green economy investments, which in turn drive economic growth. Sustainable energy development represents a new way of doing business, and it serves as the perfect blueprint for rebuilding our economy, restoring our manufacturing heritage, and leading us to greater independence and security at home.”
“Infinia is a unique solar and renewable energy company in that our supply chain consists almost entirely of retooled Midwestern auto supply companies,” said Peter Brehm, vice president of business development for Washington state-based Infinia Corporation. “Our suppliers are a testament to the goal and promise of IMPACT: taking advantage of America’s existing workforce and infrastructure to manufacture the components and systems of the clean energy economy.”