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Changing the Advanced Energy Manufacturing Game in America's Heartland

December 16, 2010 - 9:32am

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One of the big reasons we became a global economic leader is because we built things — cars, steel, furniture — you name it, we could build it faster and better than anyone else. In many ways, manufacturing provided us the pathway toward global economic success. Today, that global economic leadership is at a crossroads. As President Obama has said, “the nation that leads the clean energy economy will be the nation that leads the global economy.” Getting back to making things and investing in clean energy manufacturing can help put us back on top.

That’s why the clean energy manufacturing industry that is expanding across the Midwest — spurred in large part by the Advanced Energy Manufacturing Tax Credit, also known as 48C — is so important. As part of the Recovery Act, 183 projects (MS Excel) will receive a total of $2.3 billion in tax credits to establish, expand or re-equip clean energy manufacturing facilities. This federal investment is also being matched by nearly $5.4 billion dollars in private capital, for a total of more than $7.6 billion aimed at growing America’s clean energy manufacturing sector. The impact of these investments is especially significant in the Midwest where 41 projects (accounting for nearly $530 million in tax credits) are underway. With incentives from both the federal and private sectors, clean energy manufacturers are drawing on the traditionally strong manufacturing base of states like Ohio and Michigan to develop the next generation of solar, wind, geothermal, and other renewable energy and energy-efficient technologies.

With manufacturing facilities already in place across the Midwest, and a skilled workforce that needs little re-training, many companies realize that it’s an ideal place to set up shop. In addition to federal investments, state and local governments have created incentives to further entice them. Each new or expanding factory will generate hundreds of jobs and, in some cases, workers may even go back to the shuttered plants where they worked before the economic downturn. Add that to the fact that many of these jobs pay between $45,000 and $48,000 a year — wages that directly boost local markets.

The Midwest’s $530 million in 48C tax credits is only a fraction of the $1.76 billion in private investments that are helping to drive the new, clean energy economy. DuPont’s new solar photovoltaic plant in Ohio was selected for a $50 million tax credit, and it will manufacture enough Tedlar, an important solar photovoltaic component, to supply roughly 50% of the current market. With demand expected to rise rapidly over the coming years, DuPont is banking on this new economy. With other companies manufacturing products that span the scope of innovative technologies — from parts for renewable energy such as wind, solar, and biomass, to components for energy efficiency products such as advanced batteries, smart grid, and vehicle technologies — the Midwest stands to benefit from 48C’s impact in kick-starting jobs, and as a leader in manufacturing for the nation’s clean energy economy.

The Advanced Energy Manufacturing Tax Credit provides manufacturers with $2.3 billion in Recovery Act funding to spur private-sector investments in the advanced energy technologies we need to tackle our energy challenges. These investments create good jobs now  laying the foundation for a vibrant, clean energy industry tomorrow.

Andy Oare is a New Media Specialist with the Office of Public Affairs. 

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