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Politico Pro: Democrats’ reconciliation bill seen as biggest boost for American manufacturing since the New Deal

Posted by Gavin Bade on Nov 16, 2021

Politico Pro outlined manufacturing provisions in Congress' reconciliation bill, quoting AEE's Nat Kreamer on industry benefits. Read snippets below and the full piece here.

Tucked deep inside the Democrats’ reconciliation bill are plans for one of the biggest government-led expansions of American manufacturing.

Under the provisions, wind and solar companies would have to buy nearly all of their steel, aluminum, concrete and internal components in the U.S. to qualify for the full value of billions of dollars in lucrative tax credits. If passed, the move would represent a stark shift in American economic policy by using big tax incentives to promote domestic manufacturing...

Wind and solar companies that use imported materials in manufacture could still receive tax credits, but they would be less valuable and not eligible for direct pay from the Treasury. Developers say the incentives are likely enough to get most companies to shift to domestic suppliers, which would create a boom not just for steel, but U.S.-made aluminum, concrete and technological components.

“On one hand, the price of components may go up. On the other hand, the cost of capital goes down, because it is just frankly cheaper to take direct [payments from Treasury] than to go to the tax equity market,” said Nat Kreamer, CEO of the clean energy trade group Advanced Energy Economy, which worked with lawmakers to help shape the provisions. “There'll be a lot of investment in domestic production to meet the demand.”

On top of the manufacturing incentives embedded in the clean energy tax credits, there is a grab bag of direct subsidies to key American industries. Among them: Electric vehicle makers would get a credit building in the U.S., and more if they use union labor. There are tax credits for domestic manufacturing of computer chips, as well as high-performance batteries, hydrogen energy projects and carbon capture at power plants.

Read the full piece here.

Topics: AEE In The News