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Clean Energy Incentives Manufacturers Should Consider

Posted 5:15 PM by

In a move to accelerate investments in industrial energy efficiency, and to reward states and business that engage in such investments, President Obama signed an executive order August 30, 2012: Accelerating Investment in Industrial Energy Efficiency

The order builds on prior efforts of the administration to reduce overall energy consumption and harmful emissions in the United States, and aims to “put more people back to work and build an economy that lasts." The order claims that the industrial sector, which accounts for 30 percent of all energy consumed in the United States, may save a combined $100 billion in energy costs over the next 10 years via the proposed reduction in energy use. 

One goal specifically relates to the use of combined heat and power (CHP). In fact, the order seeks to deploy 40 gigiwatts of cost effective CHP within the United States by 2020, which the administration argues would save energy users a combined $10 billion per year. CHP systems are used by manufacturers in place of conventional electrical power to save energy and costs through means of heating water to create turbine-spinning steam. To learn more about CHP technologies, visit the U.S. Environmental Protection Agency's CHP Partnership page, or the United States Clean Heat & Power Association's site.

As evidenced by this order, the current administration plans to support states that encourage building CHP and offer tax incentives to companies that install CHP. Clean energy incentives already in place include the Production Tax Credit and the Advanced Energy Manufacturing Credit. Under the Production Tax Credit, companies using eligible energy systems can receive a credit of up to 2.2 cents per kilowatt-hour of power (kWh) used in operations through specific clean energy sources. The Advanced Energy Manufacturing Credit provides a tax credit of up to 30 percent of investments made in qualifying advanced energy projects, such as properties using wind, sun, geothermal, and fuel cell technologies.

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