Bud DeFlaviis is the Director of Government Affairs of the U.S. Fuel Cell Council, the trade association for the fuel cell industry.
In 2005, Congress passed historic comprehensive energy legislation that created an Investment Tax Credit designed to incentivize the purchase of fuel cell systems (as well as solar and wind systems.) Congress is currently considering a long-term extension of the $1000 per kilowatt (kW) up to 30% investment tax credit for qualified fuel cell property for at least an additional six years. This bipartisan-supported credit has actually passed both houses of Congress separately numerous times, with some versions even increasing the $1000 to $3000 per kW and allowing these credits to be used to offset alternative minimum tax (AMT). While the extension of the clean energy tax provisions, including the fuel cell tax credit, is a priority to most in Congress, the House and Senate have yet to agree on a package. Without action, the Investment Tax Credit will expire on December 31st, 2008.
A coalition of over 100 clean energy and environmental organizations and members of industry are lobbying Congress and the President of the United States to get long-term tax credit extensions signed into law as soon as possible.
If Congress does act and provides a long-term extension, the industry can achieve the following:
· A long-term extension will increase production volumes and lead to lower costs.
· It will give customers experience with fuel cells, helping fuel cell developers improve their products based on that experience.
· The credit will give developers – and their investors — confidence to build capacity.
· It also helps attract suppliers and their innovations – a matter of fundamental importance to our industry.
· And, of course, it creates jobs and strengthens the nation’s technological competitiveness.
· Finally, a long term commitment recognizes the evolution of the range of fuel cell technologies and products.
Creating Green Jobs
Successful extension of the long-term investment tax credit will ensure that the United States continues to pursue a dynamic plan to deploy these valuable technologies. Further, they would provide a meaningful stimulus to our economy.
Without a long-term extension, the momentum our industry has gained toward full commercialization will be lost. Failure to act will also cost our industry and the nation jobs at a time when we can least afford to lose them.
Hundreds of jobs potentially are at stake today, but hundreds of thousands of jobs are at stake in the next two decades. According to an independent study, the fuel cell industry could support 500,000 jobs by 2030. Another study is coming out soon that makes similar projections. Whether these jobs are located in the U.S. or in Europe or Asia will depend in substantial part on where the early markets for fuel cells are located. A strong, long-term Investment Tax Credit will help assure that those markets and jobs are here in the United States.
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July 14, 2008 @ 1:45 pm
Where's the Beef? says...
Bud, ITC are not nearly as effective as finding the “Killer Application” for fuel cells. Or focusing your ITC on a Killer APP. But what has happened? For the past 10 years FC community have been telling us that they are ready to commercialize in the next 2 years….DMFC (direct methanol fuel cells)were going replace batteries in everything from cell phones to laptops, ah, maybe next year… FCV only cost $1M each, and who really wants to drive around in a vehicle with a 10,000 + psi compressed fuel cylinder filled with hydrogen! I wouldn’t even want to drive with a pressure tank with nitrogen!
The one application that seems to make some economic sense is FC powered fork lift vehicles, but where is the industry incentive to move this along. While every major auto maker is spending millions on FCV, why not just convert all of your in plant fork lifts to FC”s? Every auto manufacturer and their suppliers own millions’ of such vehicles. Fueling could take place as frequently as necessary with out building a hydrogen infrastructure. Just locate the hydrogen right outside the factory and fuel up as needed. No super high pressure tanks needed This would do several things , it would begin to do some real world reliability testing, it would start a commercialization ramp up, and would let whoever has the best technology (price, effectiveness, reliability, etc.) become the winner. If FC are ready for prime time…then focus on an application that makes both economic and technology sense. The gamble is….will FC’s succeed or fail in this relatively “simple” vehicle? If it fails then, millions of dollars and jobs can go on to something more useful.
July 17, 2008 @ 11:21 am
Bud says...
Beef,
I’m not exactly sure what you mean by “killer application”, but in terms of policies being considered by lawmakers, the Investment Tax Credit is a powerful tool to proliferate fuel cell technology.
Personally, I think it’s exciting to read about all the recent fuel cells that have been installed lately. More and more, we see small stationary units being installed in homes and at telecommunications towers for backup power. We’ve also seen large fuel cell units installed at hospitals, breweries and manufacturing facilities.
As for your other comments, I agree, forklifts are an exciting pre-automotive technology that will build an infrastructure, demonstrate the technology and increase fuel cell production. (It’s helpful to point out here that fuel cell fork lifts can take advantage of the ITC).
As for your other comment about vehicle cost, that is a tired argument that is simply not accurate. Consider that fuel cell vehicles are not mass produced. And while few would argue that fuel cells are as cheap as internal combustion engines, it is helpful to know that auto manufactures, working with the Department of Energy, have made tremendous strides in bringing down the cost of the materials, components and manufacturing processes.
July 19, 2008 @ 3:46 pm
fc-skeptic says...
There is nothing inherently “renewable” about generating electricity with a fuel cell.
Why should ITCs for fuel cells be lumped in with ITCs for true renewable energy technologies like wind, solar, geothermal?
July 21, 2008 @ 11:46 am
Bud says...
Skeptic,
As you know, the tax code is frequently used to support a number of worthwhile objectives. If you look at the history of the ITC, it was initially used to rehabilitate historic property. Thanks to Congress, the ITC now covers: ‘any depreciable or amortizable property that qualifies for the rehabilitation credit, energy credit, qualifying advanced coal project credit, or qualifying gasification project credit’… So if your position is that we shouldn’t incentivize non-renewable projects, you should lobby to get rid of the tax credit for Hybrid Vehicles.
July 21, 2008 @ 1:41 pm
David Redstone says...
My position is not that we shouldn’t incentivize non-renewable projects when it is appropriate to do so.
My position is that fuel cells should not be lumped into legislation supporting true renewables just because those with a special interest in FCs want them there.
The better the political class and the general public understand what “renewable” really means, the better decisions society will make and the better off we will all be in the long run.
Lumping FCs in with “renewables” clouds the issues to no one’s benefit, except maybe those with a special interest in FCs.
July 21, 2008 @ 2:45 pm
Bud says...
So you and Skeptic DO support eliminating the tax credit for Hybrid Vehicles?
July 21, 2008 @ 3:39 pm
Mr.Sexy says...
David,
So what types of products should receive incentives, and what shouldn’t?
I would also remind you that anyone lobbying can be considered a “special interest”, including the renewable energy community.
Also, fuel cells have the ability to run off of renewable generated hydrogen. In fact a number of states currently list fuels cells as renewables, regardless of the feedstock they use.
Finally, I don’t think the ITC bill before congress has EVER been labeled as a renewable-only energy package. I wish you would be as vocal about the oil and gas tax incentives as you are about the fuel cell tax credit.
July 21, 2008 @ 4:23 pm
David Redstone says...
Bud,
Have HEVs ever been lumped in with renewables?
Has a tax credit for HEVs ever appeared in the same bill as a credit for renewables?
Has anyone ever even pretended that there is anything inherently renewable about an HEV?
Apples and oranges.
Is that the best response you have to my point?
July 21, 2008 @ 4:54 pm
David Redstone says...
“what types of products should receive incentives”
Those for which there is informed consensus that they really address the problems society wants to solve.
“fuel cells have the ability to run off of renewable generated hydrogen”
If you are talking about methane from waste water treatment plants or landfills, fine, although there doesn’t appear to be enough of that renewable gas around to make much of a difference.
If you are talking about hydrogen released from water through electrolysis using renewably generated electricity, then we are better off using that electricity directly without wasting a big percentage of it converting it into hydrogen and then converting the hydrogen back into electricity.
Think about it. The demand for electricity to run air conditioners is highest at the same time the sun shines brightest and the wind blows hardest. Why not run those ACs directly on the solar and wind power? Why waste any of that power messing around with hydrogen? (Keep in mind that it will be decades before we have built enough renewable generation capacity that we can’t use it all in real time.)
“a number of states currently list fuels cells as renewables, regardless of the feedstock they use”
I am well aware of this. I think it is a highly misleading fiction. I think Connecticut did it because the fuel cell lobby is especially strong in Connecticut. I think that it is more about jobs in CT than it is about renewable energy.
“I don’t think the ITC bill before congress has EVER been labeled as a renewable-only energy package”
The provisions for FCs always seem to be lumped in with provisions for wind and solar. That’s why the FC credit is set to expire at the same time as the wind and solar credits.
“I wish you would be as vocal about the oil and gas tax incentives as you are about the fuel cell tax credit.”
I think that the credits for gas and oil are a total ripoff. The oil companies don’t even pay the royalties that they are supposed to pay.
But there are many people arguing against oil and gas incentives in many places. The demands I see for fuel cell incentives here compel me to respond here.
July 22, 2008 @ 1:23 pm
Evil Fuel Cell Lobbyist says...
Wow David, you are not a happy camper!
Just a few observations:
1) YES, HEVs have been in the same bill with Renewable energy tax credits. In fact, quite often. The bills we (and I mean a very large number of we(s)) have been trying to pass have been voted on almost a dozen times - most often including HEVs and almost always including various energy efficiency technologies.
2) I don’t think the fuel cell industry has been selling itself as “renewable”. But we do belong in the ITC portion of the US Tax Code. The Fuel Cell credit has been in the same section of the code as Solar since EPACT 2005 — along with Microturbines, by the way. This is not a section of the code reserved for renewable technologies.
3) You might see that Fuel Cells and Solar have been working together for several years to extend our tax credits. We have introduced together bills in both the House and the Senate since 2006 because BOTH sides felt it was advantageous to work together to extend the credits. If you’d like I can refer you to individuals at SEIA to make sure we evil fuel cell types are mis-representing anything. Happy to do it!
4) Various folks on Capitol Hill and in the Media have “shorthanded” the bills before Congress to extend clean energy tax credits by calling them “renewable tax credits’ but more often “credits for wind and solar”. Believe me, we would LOVE to be mentioned more often, but we’re just not the big guy on the block. We’re OK with that. Oh, and so is the solar trade association. There are others who feel similarly marginalized: Efficiency tax credits, even some renewables like geothermal who are in the PTC but get overshadowed by wind.
5) We in the fuel cell industry have NEVER been against someone elses credits — we’re team players. Rather, we want to make sure our fuel cell credit is extended. And David, if fuel cells aren’t worth using, no one will buy them and use the credit. So nothing lost, right? Chill
July 23, 2008 @ 7:43 pm
John Trocciola says...
Redstone,
You object to fuel cells being called a “renewable” but have no problem supporting nuclear since it has no CO2 , which is true but it has something that lasts far longer than CO2 on the planet and is far more dangerous ie plutonium.
So you are a bit misleading in your scenario too. You quote some nucear lab with of course another process which eliminates the waste issue; I am sure in the foot notes there are some words “send us a billion dollars or so”
And by the way how do you propose generating electricty at night, we do require some power then and when the wind is not blowing?