U.S. green energy manufacturing is mostly assembled from foreign parts
Tax breaks aimed at rewarding homegrown goods also benefit foreign companies that assemble their green energy products on American soil. How dependent is the U.S. on imported green energy materials?
Thu, Apr 22 2010 at 5:36 PM
“Made in America” is a proud tag affiliated with many products. But as more and more items travel from overseas to the United States, there has been a serious decline in products actually constructed in America. It looks like green products are following the same trend. The New York Times reports that much of green manufacturing is merely assembled in America, despite an initiative by the Obama administration to offer tax breaks for completely homemade green goods.
President Obama has offered tax credits to green companies interested in generating domestic production. However, a loophole allows assembly plants to qualify for the credits. Consequently, countries such as China, Spain and Japan have set up assembly shops in America using green products imported from their countries. For instance, two giant Chinese companies, Suntech Power and the Yingli Green Energy Holding Company, have announced plans for a plant in Phoenix.
Tom Dyer is vice president for marketing and government policy for Kyocera Solar, a Japanese company that will assemble solar panels in San Diego from imported Japanese materials. As Dyer told the NY Times, “The act says that if you assemble in the United States, then you comply. That is what we are doing, and that is what a lot of people are doing.”
Still, some American companies are taking advantage of this initiative. SpectraWatt is a New York spinoff of Intel. This company recently started production of solar cells at a New York plant, making a component of solar panels that is often imported. Further, Spanish-owned Gamesa North America is making blades and nose cones for its wind turbines in Pennsylvania. Experts are optimistic that efforts like this will catch on because clean energy is seen as an excellent opportunity to revive homegrown manufacturing.
Despite these hopes, fewer than 200 factories in the United States are devoted to green production, in turn employing no more than 15,000 workers, according to the NY Times. Ultimately, assembly-only plants in America are doing little to revive the economy. As reported by the NY Times, fewer than 500 applications have been filed for the tax breaks. What’s more, if these applications were approved, they would add only 75,000 green manufacturing jobs to the country.
Consequently, some Democratic senators want the incentives restricted to American-owned companies. They are lobbying Congress to change the law. Green manufacturing has taken off abroad, and some worry that the United States will become as dependent on foreign countries and companies for green energy as it is for oil. Phyllis Cuttino is director of the Pew Environment Group’s Global Warming Campaign, an advocacy organization. As she concludes to the NY Times, “We don’t want to swap our dependence on foreign oil for dependence on clean energy.”
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