Biden announces $5 billion expansion of Advanced Energy Manufacturing Tax Credit

Previous program was oversubscribed 10-to-1

This guest post is by Sean Pool, Special Assistant for Energy Policy at American Progress.

A $5 billion expansion of clean energy manufacturing tax credits for wind, solar and electric vehicles is exactly what the doctor ordered. Vice President Biden announced today that the $2.3 billion of tax credits currently available under in the ARRA stimulus package’s section 48C Advanced Energy Manufacturing Tax Credit program will be expanded with an additional $5 billion.

The additional funds will leverage $15 billion in private sector investment, work immediately to create new clean energy manufacturing jobs, and go a long way toward boosting the America’s competitiveness in the global clean tech innovation race. This is great news for American workers, manufacturers, and technology developers.


CAP has advocated for an expansion of the popular Advanced Energy Manufacturing Tax Credit Program since it became clear that the $2.3 billion in available tax credits was not enough to satisfy the $25 billion worth of qualified clean energy manufacturing projects that applied. By helping to move stalled but qualified projects through the pipeline, the program expansion will work immediately to create “tens of thousands” of new American clean tech jobs. These will be long-term, private sector jobs that the Vice President said, “You can raise a family on.”

But while this announcement was made as part of a larger package of initiatives to accelerate clean energy job growth, the effects on the clean-tech manufacturing sector will be deeper and more systemic than traditional jobs spending. By bringing $15 billion of private capital “off the sidelines,” the program will work to build capacity, experience, and relationships between investors and companies within the nascent US clean-energy manufacturing sector. These relationships and experience are essential components to not only boosting the volume of American clean-energy manufacturing, but more importantly to boosting the present and future capacity of our national innovation system.

The reality is that the most important innovations we need to make progress on climate change in the short run will not come from government-funded laboratories, but from manufacturer’s assembly lines. Figuring out how to produce technologies we already have more cheaply and efficiently in this country is the key to driving cost-reductions, and increasing the international competitiveness of U.S. workers and businesses.

The U.S. will be left out of the clean energy revolution if we continue to import 70 percent of our clean energy and efficiency systems. Creating a successful domestic clean energy innovation system requires not just incentives to for clean energy generation, but also strategic and surgical incentives to ensure that the machines that do that generation are designed and produced here at home.