WASHINGTON, D.C. - U.S. Sen. Sherrod Brown (D-OH) attended a bipartisan meeting on energy and climate change at the White House this morning. Following the meeting, Sen. Brown hosted a news conference call to give an update on efforts pass clean energy legislation and outline priorities for energy independence and clean energy manufacturing jobs.
"At the meeting, there was broad agreement that the U.S. must transform our energy system. The stakes couldn't be higher - done right, a clean energy bill will be a jobs bill. It will prevent us from replacing our dependence on foreign oil with a dependence on Chinese-made clean energy components," Brown said. "With the right policies, clean energy will help revitalize American manufacturing. We must ensure that domestic manufacturers have the resources they need to make the U.S. a global leader in clean energy manufacturing."
Brown is working to build on Ohio's manufacturing heritage and existing supply chain to position Ohio as the Silicon Valley of Clean Energy Manufacturing. In Washington, he has been leading a group of senators in urging Senate leaders to promote American manufacturing competitiveness through clean energy legislation. On April 15, 2010, Sen. Brown led ten Senators in a letter to Sens. Kerry, Lieberman, and Graham calling for the inclusion of essential provisions necessary for clean energy legislation that would strengthen American manufacturing competiveness, creates new opportunities for clean energy jobs, and creates a level playing field for domestic manufacturers.
Although the manufacturing sector accounts for 12 percent - $1.6 trillion - of the U.S. gross domestic product (GDP) and nearly three-fourths of the nation's research and development, the domestic manufacturing industry has been struggling. Since 1987, manufacturing's share of GDP has declined more than 30 percent. The economic crisis exacerbated existing problems within the U.S. manufacturing industry, and manufacturers continue to face a reduction in demand and a lack of capital. Furthermore, more than 70 percent of clean energy components are manufactured outside of the U.S.
Brown outlined two key priorities for clean energy legislation - the establishment of a revolving loan fund to help former auto suppliers and small- and mid-sized manufacturers retool for clean energy production and the expansion and improvement of the Advanced Energy Manufacturing Tax Credit.
The Investments for Manufacturing Progress and Clean Technology Act
Brown introduced the Investments for Manufacturing Progress and Clean Technology (IMPACT) Act, legislation which was included in sweeping clean energy change legislation passed by the U.S. House of Representatives. The IMPACT Act would help small and medium-sized manufacturers transition to the clean energy economy by creating a $30 billion Manufacturing Revolving Loan Fund to provide much-needed access to credit. The fund, distributed by each state, would allow small and medium-sized manufacturers to improve energy efficiency, retool for the clean energy industry, and expand our nation's clean energy manufacturing operations.
The IMPACT Act would also bolster and modernize the Hollings Manufacturing Extension Partnership (MEP), the federal-state partnership, to include specific supports for clean energy retooling. Brown's bill would provide the MEP program with $1.5 billion in federal funds over five years to help manufacturers diversify to clean energy markets and adopt innovative, energy efficient manufacturing technologies. Under the bill, the federal share of MEP funding would increase to 50 percent. Based on the MEP's current average cost per consultation, the additional federal funding could enable MEP to reach at least 10,000 additional U.S. manufacturers each year. The IMPACT Act could potentially generate more than $100 billion in revenue for clean energy businesses and create 680,000 direct manufacturing jobs and nearly two million indirect jobs nationwide over five years. In May, Policy Matters Ohio released a report showing that the IMPACT Act could create between 41,063 and 52,214 new jobs in Ohio over ten years.
Expansion and Improvement of the Advanced Energy Manufacturing Tax Credit
The Advanced Energy Manufacturing Tax Credit (48C) was authorized in Section 1302 of the Recovery Act and requires the Secretary of Treasury to work in consultation with the Secretary of Energy. It provides a 30 percent credit for domestic companies for investments in new, expanded, or reequipped clean energy manufacturing projects. The program is aimed at building capacity to meet this new and growing source of demand. Qualifying facilities manufacture a wide range of clean energy products, including wind turbines, solar panels, hybrid vehicle systems, carbon capture and sequestration systems, and biofuel refinery components, among others.
Through "48C" in the Recovery Act, $2.3 billion in federal funds leveraged more than $5.4 billion of private investment that supports the creation of manufacturing jobs. The funds distributed through the first wave of funding are estimated to create 17,000 jobs, plus an additional 41,000 jobs through matching private investment.
Brown introduced legislation that would extend the program and allow for grants in lieu of tax credits. This would enable the program to reach additional companies that would otherwise be unable to utilize the program - new companies that do not yet have tax liabilities or companies that struggle to find credit in today's tight financial market. Without a grant, this program is unusable for many would-be manufacturers. Both the tax credit and grant would remain at 30 percent of the cost of the project. The bill also adjusts the selection criteria to give higher priority to facilities that manufacture - rather than assemble - goods and components in the U.S.
Recovery Act Investments Spur Growth in Ohio's Clean Energy Sector
Brown is working to position Ohio as the Silicon Valley of Clean Energy Manufacturing. Brown released a report and interactive map detailing clean energy projects in Ohio that are funded by the American Reinvestment and Recovery Act of 2009. Since the passage of that legislation Ohio has received approximately $889,865,710 for 20 Programs overseeing 219 projects.
According to a report released by the Council of State Governments, Ohio led the country in the number of clean energy jobs created by the Recovery Act during the first reporting period. Ohio is also a national leader in the number of homes weatherized through the Home Weatherization Assistance Program.
The Upper Scioto Valley School District has been able to embrace clean energy as a result of federal support, becoming the first district in the country to install commercial solar and wind equipment, powering 40 percent of the District's needs, a move that has already begun to reap financial benefits for Upper Scioto Valley Schools.