New bipartisan legislation unveiled in the US Congress this week would provide a tax credit to support domestic solar manufacturing.
U.S. Senator Debbie Stabenow (D-MI) and U.S. Congressman Dave Camp (R-MI) announced the Solar Manufacturing Jobs Creation Act, which aims to encourage more U.S. companies to produce solar equipment in the US, creating solar jobs and investing in the clean energy economy.
Currently, a 30 percent Solar Investment Tax Credit (SITC) exists for the investment in or installation of solar power technology. Under the Solar Manufacturing Jobs Creation Act, equipment and facilities used to manufacture solar power technology would be added to the eligible property list for the SITC. These technologies include solar cells, silicon, evacuated tubes, and flat-plate solar collectors.
Senator Stabenow joined fellow Senators Robert Menendez (D-NJ) and Michael Bennet (D-CO) to introduce the legislation this week in the Senate. Congressman Camp will be introducing companion legislation in the House later this month.
“This bill will provide additional tax credits for solar equipment manufacturers that will help us win the global race against China and other countries to produce solar technology in the clean energy economy,” Stabenow said.
The United States is losing the global race for solar technology as other countries provide incentives to invest in solar manufacturing. According to the Solar Energy Industry Association (SEIA), the U.S. produced more than 40% of the word’s solar photovoltaic (PV) cells a decade ago. In 2008, the U.S. produced only 5% of the world’s solar cells. They estimate that the tax credits in this legislation will generate 315,000 new domestic jobs.
“Not long ago, the U.S. was the leading global manufacturer of photovoltaic solar cells. But we’ve fallen behind Europe and Asia because we didn’t have the right policies in place," SEIA CEO Rhone Resch said in a release. "By extending and expanding the solar manufacturing tax credit, we’ll have the support necessary to compete with other countries and continue creating jobs in the solar industry. These jobs are particularly important for states that rely on manufacturing, one of the sectors that has been hardest hit by the economic downturn.
Earlier this week GE (NYSE: GE) and Evergreen Solar (Nasdaq: ESLR) both announced plans to reduce solar manufacturing in the US. Analysts suggested competition from low-cost manufacturing in China led to the decisions.
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