The National Venture Capital Association (NVCA) and TechNet strongly support the addition of two critical energy tax provisions to the tax bill. The Treasury Grant Program, Section 1603 and the Advanced Energy Manufacturing Credit, Section 48C are both due to expire at the end of the year and, if they are allowed to lapse, investment into clean energy technology companies in the United States will suffer. Failure to extend these critical energy tax programs will further widen the lead that other countries – most notably China – now enjoy in the global clean energy marketplace.
Hundreds of renewable energy companies have applied for and received Section 1603 “grants in lieu of tax credits.” In turn, these companies have used the cash grants to fuel their growth in the creation of thousands of new “green jobs” in the U.S. Without Section 1603, the investment and production tax credits intended to benefit these companies will remain dormant and fail to achieve their legislative purpose.
Similarly, Section 48C of the Internal Revenue Code provides a 30% tax credit for investments in facilities that manufacture components for the production of renewable or clean energy. The program was over-subscribed, and the 48C credit was instrumental in incentivizing the location of manufacturing plants and the creation of high-wage, skilled “green jobs” in the United States.
We believe that tax policy must be used to link American innovation with American production. All too often in the past innovating American companies have located their manufacturing plants in other countries. The provisions contained in Sections 1603 and 48C are vital to our ongoing global competitiveness. The NVCA and TechNet are asking Congress to take this opportunity to ensure our clean energy future with these extensions.
The economic downturn has significantly reduced the amount of private sector lending. For technologies that require significant upfront costs, the 1603 and 48C programs have been critical. Both of these programs proved extremely popular and the demand remains; extending them will help the clean tech industry move forward as the economy continues its slow recovery.
According to NVCA President Mark Heesen, “For the first time, tax policy was used to link American innovation – where the U.S. has always been strong –with American production – where too often in the past innovating companies have located their manufacturing plants in other countries so that they could remain viable companies.”
TechNet President and CEO Rey Ramsey added, “Clean tech represents an enormous economic opportunity for the United States and if we are to be a global leader in this area, we must support the growth of companies and entrepreneurs. The Treasury grant programs are effective in creating good paying jobs nationwide. Therefore, they ought to be extended.”
TechNet is the national, bipartisan network of CEOs that promotes the growth of technology industries and the economy by building long-term relationships between technology leaders and policymakers and by advocating a targeted policy agenda. TechNet’s members represent more than one million employees in the fields of information technology, clean energy, biotechnology, e-commerce and finance. TechNet has offices in Washington, DC, Palo Alto, Sacramento, Seattle, Boston and Austin,Texas. Web address: www.technet.org.