Obama announces $5.4B in tax credits to stimulate green job market
With climate policy grinding to a halt in Copenhagen, president Barack Obama turned his attention to the domestic growth of green today, announcing that $5.4 billion in tax credits will be granted to spur the creation of tens of thousands of new green collar jobs in the next three years, predominantly in the manufacturing sector.
The idea behind the tax credits is to prod private investors to sink up to $15 billion into clean energy companies with major manufacturing components. The program should lower the costs of some of the more capital intensive energy projects — the building biorefineries, wind farms and solar arrays, for instance.
It’s significant that the credits are targeted at the U.S. companies themselves, and not at the end consumers, like they are in countries like Germany and Spain. While that might encourage more people to buy rooftop solar panels, they would probably just be creating more jobs in China, Japan and Korea, where the bulk of panels are made. The overarching idea is to create jobs at home — a more challenging feat considering how cheaply equipment can be manufactured overseas.
The $5.4 billion comes on top of an existing $2.3 billion for energy manufacturing, and a 30 percent tax credit for any investments made in factories that churn out wind turbines, solar panels, electric and hybrid vehicles and advanced batteries. This could be very good news for companies like Solyndra, Tesla Motors, Fisker Automotive, and First Solar. The Silicon Valley, in particular, could get a real boost from the announcement.
