Are you eligible for a manufacturing tax credit?

Share Button

By Elisa Wood

September 10, 2009

The United States has been generous with tax credits for energy production. But until now, it’s been somewhat miserly about giving breaks to those who make the equipment that makes the energy – or saves it.

That’s changed with creation of the Advanced Energy Manufacturing Credit (MTC), part of the federal stimulus package. The 30% tax credit makes $2.3 billion available for new, expanded, or re-equipped domestic manufacturing facilities that produce clean energy equipment.

But with the deadline for applications right around the corner – September 16 – manufacturers are perplexed by eligibility requirements and wondering if they qualify.

Bridget Hust, partner with the law firm Faegre & Benson, who has been pouring over the rules on behalf of clients, says application requirements are “all over the map.” She suggests that if you think you might be eligible, then apply. It may not be clear exactly who will qualify until mid-January when the Internal Revenue Service accepts or rejects applications. And even those that are rejected may have a shot at revising and resubmitting their proposals, she said. The Feds plan to keep giving out money until the $2.3 billion is exhausted.

The credit seems particularly wide open for technologies that reduce carbon dioxide emissions – even the more obscure approaches. Hust says she is particularly eager to see how the tax credit affects manufacturing of advanced transmission, smart grid and energy storage products, since they may be key to integrating more wind power into the system.

The DOE says the credit is available for:

  • Technologies that create energy from renewable resources (sun, wind, geothermal and other renewable resources)
  • Energy storage technologies (fuel cells, microturbines or other energy storage systems used in electric vehicles)
  • Advanced transmission technologies that support renewable generation (including storage)
  • Renewable fuel refining or blending technologies
  • Energy conservation technologies (advanced lighting, smart grid)
  • Plug-in electric vehicles & vehicle components  (motors, generators)
  • Property to capture and sequester carbon dioxide
  • Other property designed to reduce greenhouse gas emissions

The manufacturer may not need the credit, particularly in a down economy where many lack taxable income. But like the solar and wind production tax credits, it could draw third-party investors in need of a tax break who will partner with the manufacturer.

See Hust’s white paper for more details http://www.faegre.com/showarticle.aspx?Show=10112, or go to http://www.energy.gov/recovery/48C.htm

Visit Elisa Wood at http://www.realenergywriters.com/ and pick up her free Energy Efficiency Markets podcast and newsletter

Share Button

Free Resource from Microgrid Knowledge White Paper Library

How to Optimize Energy Storage in a Microgrid
In this paper, new voltage sensitivity indexes are proposed to search and evaluate the candidate buses in a microgrid, where the energy storage systems can be installed to contribute most effectively to the system. To learn more about optimized energy storage in a microgrid download this white paper.
Sign up for our newsletter and get the latest microgrid news and analysis.
Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

Leave a Comment

*