By Ben Geman - 11/19/09 11:00 AM EST
Solar energy companies are lobbying for new tax credits for domestic manufacturers that would come on top of subsidies included in the $787 billion stimulus package enacted earlier this year.
The effort is unfolding alongside the Obama administration’s push to spur “green” jobs by expanding this kind of manufacturing.
The administration argues the U.S. is falling behind other countries in its capability to produce such materials.
Capitol Hill Democrats, meanwhile, are vowing new jobs legislation that backers might eye as a vehicle for the new tax credits for solar panel components.
“If Congress does, because of high unemployment, pass a jobs growth bill, the manufacturing tax credit is a perfect fit,” said John Stanton, a lobbyist for the Solar Energy Industries Association.
“The sole purpose of the bill is to create new jobs,” he said.
Lawmakers on the House and Senate tax-writing committees offered identical bills this month that provide a new 30 percent credit for investments in equipment used to manufacture solar energy system components.
The bills would make these investments eligible for the existing 30 percent credit for installation of residential and business solar energy systems, which is available through 2016.
The Senate plan is backed by three Finance Committee members: Debbie Stabenow (D-Mich.), Robert Menendez (D-N.J.) and Ron Wyden (D-Ore.). The House version introduced Tuesday is sponsored by Ways and Means Committee members Mike Thompson (D-Calif.), ranking member Dave Camp (R-Mich.), Patrick Tiberi (R-Ohio) and Lloyd Doggett (D-Texas).
An aide to Stabenow said a number of vehicles are possible for the bill, including the planned jobs bill and broader energy legislation.
The new bills come in addition to a provision in the sweeping economic stimulus law that created a new credit this year for manufacturing various types of advanced energy equipment. The Treasury and Energy departments, which are jointly administering that program, began inviting applications several months ago. Some solar companies have applied, Stanton said.
But backers of the new bills say the total of $2.3 billion in energy manufacturing credits in the stimulus law will be exhausted quickly. This was further confirmed Wednesday when Carol Browner, the top White House energy and climate adviser, said the tax credit in the stimulus is already “oversubscribed by a significant amount.”
According to the solar trade group, other countries have offered more incentives than the U.S. to attract solar manufacturing. While the U.S. accounted for over 40 percent of worldwide photovoltaic cell production a decade ago, it had fallen to 5 percent in 2008, the group said.
The bill’s sponsors say their plan can reverse the trend. “This bill would add incentives for companies to produce these products domestically and create good jobs. In these troubled economic times, we need to do all that we can to add jobs and move toward energy independence,” Thompson said in a prepared statement.
While prospects for the bill are unclear, efforts to expand domestic manufacturing are in sync with Obama administration efforts to create alternative-energy-sector jobs.
The first Energy Department loan guarantee for low-emissions energy projects was issued earlier this year — a $535 million commitment to California solar panel maker Solyndra Inc. to build a second manufacturing plant.
The agency has also offered financing to Nordic Windpower to expand its turbine assembly plant in Idaho, and further support is planned.
But Browner, speaking at a climate change conference in Washington on Wednesday, said further policies are needed to bring more energy manufacturing jobs to the United States — including renewable energy and climate legislation the White House is seeking.
“What we have to do is create the demand here,” she said. “We have to give these companies … the guaranteed opportunity to sell their products here because we have a renewable electricity standard, because we have a cap on greenhouse gases.”