Report Adds Fuel to Sen. Schumer's 'Buy American' Stimulus Feud

The United States should act fast to build up the country's manufacturing industry for renewable energy systems or risk losing green jobs to China and other low-wage nations, according to a new report by advocacy organization Apollo Alliance and Good Jobs First, a labor-oriented research group.

The report's recommendations include fixing the nation's renewable energy stimulus funding so recipients who relocate operations overseas are forced to repay their hefty government handouts.

"We don't currently have the capacity to supply our own demand for clean energy products and systems," Sam Haswell, spokesperson for Apollo Alliance, told SolveClimate.

The U.S. is currently importing about 70 percent of its renewable energy parts from foreign countries, according to the report. If that continues, the report estimates, the U.S. will lose out on 100,000 clean energy manufacturing jobs and nearly 250,000 by 2030.

To gauge the direction of renewable energy manufacturing in America, the authors analyzed the list of winners of the Advanced Energy Manufacturing Tax Credit program, known as 48C credits. The $2.3 billion program, part of the 2009 Reinvestment and Recovery Act, provides a 30 percent tax credit for investments in new, expanded or re-equipped advanced energy manufacturing projects making materials for cleaner power generation.

The report focused on wind and solar plants, which accounted for about 68 percent of the payouts. Ninety domestic and foreign parent companies have received funding to build solar and wind plants in America, the report found. Of that total, 25 are investing in similar factories in America's clean energy competitors: China, India, Mexico and Malaysia.

In fact, several of these companies — including Colorado-based Advanced Energy Industries, Arizona-based First Solar, China-based Suntech Power and California's SunPower Corporation — are making low-wage nations their primary manufacturing hubs.

This is especially true of China, the current global leader in the manufacture of wind and solar components.

The pattern is a cautionary tale, the report suggests.

"While the 48C credits are likely leading these companies to pay more attention to U.S. production, it is also possible that their American manufacturing activities are little more than fig leaves meant to hide the fact that they are mainly relying on offshore low-wage activities," the authors wrote.

Stimulating U.S. Jobs Only

The report recommends the 48C program be extended by $5 billion, as President Obama proposed in his 2011 budget, but with a catch: a "clawback" provision that would allow the feds to take back taxpayer dollars from stimulus winners if they close up shop too soon in the U.S. and create jobs overseas.

"A clawback provision would only punish those companies that accepted a credit and then did not sustain their operations in the United States for some minimum period of time — say five, 10 years," Haswell said.

A group of Democratic U.S. senators has gone further.

Sens. Charles Schumer (D-N.Y.), Bob Casey (D-Pa.), Sherrod Brown (D-Ohio) and Jon Tester (D-Mont.) launched a campaign last week to suspend a related section of the Recovery Act, the section 1603 cash grant program, indefinitely. "until the law can be fixed." The program allocates 30 percent cash grants to renewable energy projects. 

Schumer cited reports from the Investigative Reporting Workshop at American University that calculated 79 percent of $2.1 billion given out in clean-energy cash grants had gone to foreign companies.

Along with Sen. Arlen Specter (D-Pa.), the senators introduced a bill that would put a "buy American" provision on all projects getting government money under section 1603.