Obama Administration Plans to Spend $150 Million for Green Energy Projects (Because It’s Worked So Well Before)

Michael Sandoval / March 25, 2013

Rainer Jensen/dpa/picture-alliance/Newscom

Just what America needs: More taxpayer-funded green energy projects.

The Department of Energy (DOE) and the U.S. Internal Revenue Service released plans to re-allocate more than $150 million in remaining manufacturing tax credits for “green” energy projects originally authorized by the 2009 American Recovery and Reinvestment Act (the stimulus bill), according to Recovery.gov.

Phase II of the Section 48C Advanced Manufacturing Tax Credit seeks to grant the tax credits on a competitive basis to green energy projects that demonstrate “commercial viability, domestic job creation, technological innovation, speed to project completion, and potential for reducing air pollution and greenhouse gas emissions,” the DOE wrote.

The $150 million in funds remaining were left over from “remaining tax credits that were never fully monetized by previous awardees,” the DOE announced. The agency’s original authorization for the program stood at $2.3 billion, with individual awards available of up to 30 percent of the project cost. According to the White House, 183 manufacturing facilities qualified during the tax credit’s initial authorization.

However, The Heritage Foundation’s Jack Spencer says in demonstrating “commercial viability”—in other words—“by meeting the conditions to receive the credits, the applicants actually demonstrate that they do not need the credits.”

Among the initial recipients of the 48C tax credit are companies that have declared bankruptcy, shut down production facilities, or laid off workers:

• Abound Solar ($12.6 million), a solar panel manufacturer which declared bankruptcy in June 2012 after its panels were found to have “catastrophic failures,” now faces the potential burial of its solar panels in cement.
• Amonix ($9.5 million) is a solar manufacturer whose Nevada facility is now shuttered after the company suffered quality issues and lacked an “economically viable” product.
• First Solar ($16.3 million), a solar manufacturer, laid off 30 percent of its workforce in early 2012.
• Gamesa ($30.9 million), a Spanish wind manufacturer, announced layoffs in mid-2012.
• REC Solar Grade Silicon ($154.8 million), the recipient of the largest 48C tax credit, announced in February that it would lay off workers.
• SolarWorld ($82.2 million), a German solar manufacturer, announced layoffs late in 2012.
• Vestas ($51.8 million), a Danish wind turbine and tower manufacturer, announced amid layoffs in 2012 a plan to use Colorado unemployment funds to retain employees.

Tens of millions of dollars in tax credits were also allocated to well-known companies like Dow, Dupont, General Electric, and Siemens for a variety of solar, wind, and other manufacturing facilities. The Heritage Foundation’s Nick Loris pointed to the deficiencies and distortions created by the billions of dollars in energy subsidies:

[G]overnment subsidies merely concentrate power in Washington. Energy subsidies merely shift labor and capital away from economically viable projects that would actually help grow our economy to those projects that have political preference. Further, subsidies increase the incentive to lobby and perpetuate mediocrity in technological innovation by removing the incentive to lower costs and compete in the marketplace without the subsidy.

The DOE will begin considering “qualifying manufacturing facilities” for the tax credits on April 9, 2013, and continue through July 23, 2013:

This important tax program supports the Obama Administration’s all-of-the-above strategy that develops every source of American energy—a strategy that reduces costs for consumers, better protects our air and water, and provides for true energy independence for the United States.

The list of qualifying facilities includes solar, wind, geothermal, or other renewable energy equipment; electric grids and storage for renewables; fuel cells and microturbines; energy storage systems for electric or hybrid vehicles; and carbon dioxide capture and sequestration equipment.