US announces $2.3bn in clean energy tax breaks

The torrent of US stimulus funds flowing into the clean tech sector continued yesterday when the Treasury and Department of Energy jointly announced plans to award $2.3bn (£1.4bn) in new tax credits to manufacturers of clean energy equipment.

The new programme is modelled on the existing tax credit programme for renewable energy developers and follows hot on the heels of the launch earlier this month of a new $3bn renewable energy fund offering direct payments to project developers.

Under the scheme, which was authorised as part of the American Recovery and Reinvestment Act, the Treasury will provide an investment tax credit of 30 per cent for facilities that manufacture low-carbon energy equipment.

Eligible technologies include fuel cells, batteries, electric cars, advanced grid systems, solar energy systems, carbon capture and storage, large and small-scale wind turbines, geothermal energy equipment and energy conservation technologies.

The Treasury said the tax credits will be available for two years or until the $2.3bn cap is reached.

"These tax credits will help create thousands of high-quality manufacturing jobs in some of the highest-growth segments of the economy," predicted energy secretary Steven Chu. "This is an opportunity to develop our global leadership in clean energy manufacturing and build a secure, sustained base of jobs for America's workers."

The Treasury and the Department of Energy jointly issued guidance designed to help firms successfully apply for the new tax credits.

They also signalled that successful applicants could expect to receive the credits relatively swiftly, stating that companies can expect to receive payments within 180 days of filing for the credit.