USA - IRS, DOE Release Application Information for Manufacturing Tax Credit

On August 13 the U.S. Department of Energy (DOE) and the Internal Revenue Service released the much-anticipated application guidance and evaluation criteria for the 30% “advanced energy” manufacturing investment tax credit that was part of the economic stimulus package passed earlier this year.

Full information on the guidance, which came via Notice 2009-72, is available at www.energy.gov/recovery/48C.htm. AWEA will host a members-only Webcast on Thursday, August 20, at 2 p.m. to discuss details of the credit (details below).

The Qualifying Advanced Energy Project Credit, commonly known as the Manufacturing Investment Tax Credit, was a provision in the 2009 American Recovery and Reinvestment Act. Under the provision, companies can receive a tax credit of up to 30% of their investment in new, re-equipped and expanding manufacturing facilities that provide equipment for wind turbines and other green technologies. The program has been allocated $2.3 billion.

AWEA welcomed the release of the information. “Wind power is a bright source of manufacturing jobs in the U.S. today,” said CEO Denise Bode. “With this incentive and with the right policies in place, it can become an even much larger source of jobs tomorrow.”

Bode noted that the share of domestically manufactured wind turbine components has risen to 50% in the wind turbines installed in the U.S. in 2008, up from less than 30% in 2005. “The domestic share can increase further with the stimulus funding now beginning to flow, coupled with a strong, long-term policy commitment—if Congress passes a strong renewable electricity standard,” she said.

In 2008 alone, 55 wind energy manufacturing facilities were announced, opened or expanded. While the current economic conditions have dampened demand, the tax credits are expected to boost the opening of new facilities.

Under the guidance, projects will be ranked by DOE through four criteria, each of which will be considered equally. Those criteria include direct and indirect job creation during the credit period, net impact in avoiding or reducing air pollutants and emissions of greenhouse gases, potential for innovation and commercial deployment, and shortest project time from certification to completion. Overall, projects must be completed within four years. In considering the applications, DOE will also strive for diversity geographically, technologically, and in size.

Interested parties must submit separate applications to DOE and the IRS. Preliminary applications to DOE must be received between August 14 and September 16. Final applications are due October 16, and applicants will be notified of their status in January. Full application guidelines are available at the website above. An AWEA summary of the credit is available on AWEA’s Web site at http://www.awea.org/legislative/pdf/Manufacturing_ITC_Summary.pdf.

For more information on the AWEA members-only Webcast, go to https://www1.gotomeeting.com/register/913351705.