Green on the Hill: Rebates green manufacturing plants delayed ... for now

June 30, 2010

Efforts apparently have fallen short—at least near-term—to include an amendment providing rebates to manufacturers that purchase energy-saving lighting, cooling, and heating equipment for their production facilities that result in specific energy use reductions.

The Senate Energy and Natural Resources Committee decided not to include as an amendment to an energy bill a proposal from Sen. Jeff Merkley, D-Ore., called the Building Star Energy Efficiency Act of 2010 (S. 3079.Itestablishes a rebate program within the Department of Energy (DOE) for manufacturers that purchase (1) insulation, energy-efficient windows, and qualified high-efficiency window films and screens; (2) new energy-efficient equipment, such as boilers, furnaces, and water heaters; (3) unitary air conditioners and unitary heat pumps; (4) variable-speed drives for motors; and (5) updated interior lighting.

The bill the committee considered in May is actually a package of amendments that would be tacked onto an omnibus energy bill the committee already passed in July 2009. That bill (S.1462) has not been taken up by the full Senate because it lacks broad support. This new package of amendments is being produced to finally attract the 60 votes necessary to pass S.1462, which does have a section addressing manufacturer energy efficiency needs—although not one as dramatic as the Merkley bill.

Section 206 of S. 1462 authorizes 50/50 (federal/private partnership) cost-shared competitive grants to stimulate the development and widespread deployment of innovative energy-efficient technologies and processes for manufacturing and industry. The one-time federal grant to an unspecified number of grantees could be as high as $500,000.

Bill Wicker, the Senate Energy Committee press secretary, said, “Alas, Building Star--which supports commercial building retrofits and which, conceptually, Chairman Bingaman supports--is not among the proposals that enjoy consensus support in the committee. Maybe later.”

Also excluded from the May committee amendments (to S.1462) package was one from Sen. Bernie Sanders,’ I.-Vt., 10 Million Solar Roofs and 10 Million Gallons of Solar Water Heating Act of 2010 (S. 2993). The Merkley and Sanders bills face the same predicament, according to committee sources: No one has come up with the federal revenue to pay for the efficiency incentives.

However, the DOE is apparently about ready to roll out nearly $400 million in incentives for the Recovery Through Retrofit initiative which is aimed primarily at the residential market. But Cathy Zoi, DOE Energy Efficiency and Renewable Energy assistant secretary, said money for the demonstration projects the program will fund will also go to commercial buildings, though presumably those in residential neighborhoods. Although manufacturers ostensibly will not be among the eligible users in these demonstration projects, they certainly can benefit as vendors of green equipment.

Stimulus Bill Renewable Incentives Need Updating

Renewable-energy advocates are pushing for continuation of expiring incentives established in the 2009 stimulus bill. The American Recovery and Reinvestment Act (ARRA) established a Section 1603 grant program and a Section 48C advanced-energy tax credit. The former provides money to developers of solar and wind farms, and the latter goes to manufacturers mostly for retooling factories to produce renewable products such as wind turbine components.

The Treasury Department says there are many more projects that could be funded except for the fact that the 1603 program deadline is fast approaching and the 48C program has run through the $2.3 billion from the ARRA. The Obama administration has asked Congress for another $5 billion for Section 48C. The ARRA allows the IRS section tax credit to be converted into a grant awarded by the Treasury to manufacturers that put solar energy-generating property in service (hence manufacturers that have rooftop panels installed on their facilities also qualify) before Jan. 1, 2011.

Matthew Beck, spokesman for Rep. Sander Levin, D-Mich., chairman of the House Ways and Means Committee, said Levin has indicated his interest in moving a green energy jobs bill this Congress. That would be the vehicle for extending the Section 1603 deadline and approving new funding for Section 48C.