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Treasury, Energy Announce more than $2 Billion in Recovery

"Tax Credit Program Will Increase Economic Development,
Promote Manufacturing of Clean Energy Equipment"

As part of an innovative partnership aimed at increasing economic development while setting our nation on the path to energy independence, the U.S. Department of the Treasury and the U.S. Department of Energy today announced a program to award $2.3 billion in tax credits to manufacturers of advanced energy equipment. Authorized by the American Recovery and Reinvestment Act (Recovery Act), this new program will provide tax credits to manufacturers who produce clean energy equipment.

"This program will help encourage innovation in design of clean energy technologies," said Treasury Secretary Tim Geithner. "This partnership between Treasury and Energy adds an important new dimension to the incentives created in the Recovery Act to improve energy efficiency, and develop alternative sources of energy."

The Recovery Act created a new tax credit program by authorizing Treasury to provide developers with an investment tax credit of 30 percent for facilities that manufacture particular types of energy equipment. Qualifying manufacturers will produce solar, wind, and geothermal energy equipment; fuel cells, microturbines, and batteries; electric cars; electric grids to support the transmission of renewable energy; energy conservation technologies; and equipment that captures and sequesters carbon dioxide or reduces greenhouse gas emissions.

Said Energy Secretary Steven Chu: "These tax credits will help create thousands of high quality manufacturing jobs in some of the highest growth segments of the economy. This is an opportunity to develop our global leadership in clean energy manufacturing and build a secure, sustained base of jobs for America's workers."

The manufacturing tax credit is capped at $2.3 billion, and credits are available for two years or until the cap is reached. Companies can file applications for the first round of credit awards through October 16, 2009, and can expect to learn whether their applications are successful by January 15, 2010. To view the program summary and guidance for applying for the tax credit, please visit here [ http://www.energy.gov/recovery/48C.htm ].

The announcement of the manufacturing tax credit is the next step in an innovative partnership between Treasury and Energy aimed at promoting energy production and energy independence. Tax programs have provided successful incentives for encouraging the development of renewable energy in the past - in 2006 alone, approximately $550 million in renewable energy tax credits were provided to 450 businesses. In July, Treasury and Energy announced the availability of payments 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 in rural and urban communities.

Source: U.S. Department of State