The End of Renewable Manufacturing?

The July 2011 Congressional deficit debates led into the biggest tax cuts the U.S. has seen in quite
some time. A number of programs were either shaved or will simply go un-renewed at their deadline.
Others were shutdown almost immediately. One of the industries that saw a lot of attention during and
after the debates was the renewable manufacturing industry. It seems that while one faction in Congress
tried to work with the President to save the incentives that the industry thrives on, the prevailing leaders
won the right to drastically reduce the one thing that has brought more than 75,000 jobs to the U.S. So,
what will the fate of renewable manufacturing be in the future. According to many sources, the outlook
isn’t good.

Ignored Deadlines

According to Bloomberg News, the game plan for many of the renewable energy manufacturing
incentives is to let them expire. Congress will simply fail to renew them when the times comes. Gone
without ceremony, essentially. Incentives put in place during the Bush era, that were before simply
renewed as a formality will be heavily scrutinized or ignored, depending on the state of the economy at
year’s end. The biggest decline will be seen in the next few years, as over $50 billion in tax incentives
are up for renewal between 2011 and 2013.

Drastic Declines

Those aren’t the only declines expected. The highest year for incentives was in 2010. According to
Bloomberg, with $74.5 billion in tax credits, grants and other incentives. By 2013, that number is
estimated to be $21.4 billion. Treasury grants alone are $4 billion for 2011, but will be less than $620
million by 2016. Globally the numbers are looking bleak as well, due to the international economic
crisis in progress.

States to the Rescue?

Manufacturers should keep in mind that those are federal numbers. The states still have the authority
to make their own incentives, as needed according to their own budgets. Some of the states that are
operating with little debt trouble today, may be the homes of renewable manufacturing tomorrow.
States are actually using their incentives to competitively fight for the new plants and business. This
competition will only increase as the federal incentive numbers decline.

Congress did anticipate a major decline in renewable manufacturing when they decided to leave the
industry out of the deficit compromise. Instead of ending the industry as many analysts believe, what
may occur is a newfound competition for the green manufacturing companies across the country.

Eagle Technologies Group is an industry leader in the design and implementation of factory automation systems worldwide.

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