LEDs and EVs Get Largest Benefits from $150 Million in Tax Credits from DOE

December 15, 2013 by Jeff Shepard

The U.S. Department of Energy announced $150 million in clean energy tax credits to build U.S. capabilities in clean energy manufacturing. The credits will go towards investments in domestic manufacturing equipment by 12 businesses. Through the Advanced Energy Manufacturing Tax Credit program (48C Program), these awards are expected to help create thousands of jobs across the country and increase U.S. competitiveness in the global clean energy market. Among the largest awards were $30 million to Cree, Inc., another $30 million to Ford Motor Company, $20 million to General Motors Company and $10.6 million to Delphi Automotive Systems LLC.

According to the announcement, Cree was selected for a $30 million 48C Advanced Energy Manufacturing Tax Credit to expand the company’s manufacturing footprint in Durham, North Carolina, and Racine, Wisconsin, where it produces energy-conserving lighting technologies. The expansion includes the purchase, installation and proprietary modification of new machinery that will allow Cree to produce 304 million next generation LED lighting systems. With this project, Cree is taking the next step toward its goal of making traditional lighting products obsolete through the use of advanced LED technology with significant estimated annual energy savings.

Ford transformed its Michigan Assembly Plant (MAP) in Wayne, Michigan, from a factory that produced full-sized trucks and SUVs to the world’s first and most flexible manufacturing facility for multiple electrified vehicles. MAP is now producing plug-in hybrids, hybrids, EcoBoost, and full battery electrics for the global marketplace—all from the same assembly line. The $30 million 48C Advanced Energy Manufacturing Tax Credit will help Ford remain an industry leader in fuel economy and enable its substantial investment in electrified vehicles, which is critical to improving U.S. energy security, reducing greenhouse gases and supporting American auto jobs.

General Motors Company was selected for a 48C tax credit of more than $20 million in connection with its Detroit-Hamtramck Assembly Plant where the company manufactures Extended Range Electric Vehicles—Chevrolet Volts and the Cadillac ELR electric luxury coupe—along with internal combustion cars. Production of these vehicles at Detroit-Hamtramck will support development of propulsion technologies and advanced electric-drive vehicles that reduce greenhouse gas emissions and petroleum consumption.

And With its $10.6 million 48C Tax Credit, Delphi Automotive Systems plans to invest $35.3 million through 2017 in equipment and tooling at its Kokomo Power Electronics facility in Indiana. This facility expansion will further scale up product validation and manufacturing, doubling capacity to more than 500,000 units annually to meet its customers’ production volumes. Delphi manufactures power electronics such as inverters, converters, chargers, controllers, integrated energy storage and electrical power management systems. The project is expected to create more than 150 new direct jobs, and will help Delphi remain competitive in the global electrified vehicle market by further reducing its production and engineering unit costs.

U.S. Secretary of Energy Ernest Moniz announced the 48C Program awards at the Energy Department’s American Energy and Manufacturing Competitiveness Summit, jointly sponsored by the Council on Competitiveness. As part of the Department’s broader Clean Energy Manufacturing Initiative, this summit brings together industry, government, academia and the Department’s national laboratories to address national challenges in manufacturing and energy.

“Cost-effective, efficient manufacturing plays a critical role in continuing U.S. leadership in clean energy innovation, and the tax credits announced today will help reduce carbon pollution from our vehicles and buildings; create new jobs and supply more clean energy projects in the United States and abroad with equipment made in America,” said Energy Secretary Ernest Moniz.

The Departments of Energy and the Treasury worked in partnership to develop, launch, and award the funds for this program. The Advanced Energy Manufacturing Tax Credit authorized Treasury to provide developers with an investment tax credit of 30 percent for the manufacture of particular types of energy equipment. Funded at $2.3 billion, the tax credit was made available to 183 domestic clean energy manufacturing facilities during Phase I of the program. Today’s awards, or Phase II, were launched to utilize $150 million in tax credits that were not used by the previous awardees and support projects that must be placed in service by 2017.

The overall awards include domestic manufacturing of a wide range of renewable energy and energy efficiency products – from hydropower and wind energy to smart grid technologies to fuel efficient vehicles – and will support thousands of new manufacturing jobs in nine states and dozens of supply chains throughout the United States. These projects, subject to final certification, include following:

Energy Efficient Buildings: With the support of $5.1 million in 48C Program tax credits, Carrier Corporation will expand production at its Indianapolis facility to meet increasing demand for its eco-friendly condensing gas furnace product line. The new line includes the most energy efficient gas furnaces on the market – all with at least 95 percent annual fuel utilization efficiency.

Fuel Efficient Vehicles: Corning Incorporated received $30 million in 48C Program tax credits to expand the manufacturing capacity of its diesel emissions control products facility in Erwin, New York. The site development and infrastructure enhancements support domestic and international demand for ceramic substrates and filters for heavy-duty diesel engine, truck, construction and agricultural equipment. Corning’s project benefits the local economy with an estimated 200-250 permanent manufacturing and warehouse jobs and 275 temporary construction jobs.

Renewable Energy: Natel Energy Inc. makes low-head, high-flow hydroelectric turbines for new, distributed, utility-scale hydropower projects as well as for retrofitting dams and irrigation canals. With more than $2 million in 48C Program tax credits, Natel is equipping a manufacturing facility on California’s former Alameda Naval Air Station. The facility will produce 200 turbines annually – roughly 90 megawatts – to enable environmentally friendly hydropower development worldwide.