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Jeanette PA Business Says Legislation Would, “Allow More Projects, Improve Competitiveness” / Energy Efficiency Tax Credits On the Books Yet Too Many PA Businesses Can’t Access Them / Bipartisan Legislation Will Increase U.S. Energy Efficiency And Independence And Create New American Jobs

WASHINGTON DC – Today, U.S. Senator Bob Casey (D-PA) announced that he and Senator Susan Collins (R-ME) have introduced the Power Efficiency and Resiliency (POWER) Act that will help more businesses in Pennsylvania and across the nation access existing energy efficiency tax credits that incentive converting so-called waste heat and combined heat to power. Rep. Tom Reed (R-New York) and Rep. Blumenauer (D-Oregon) have introduced a companion bill in the U.S. House of Representatives.

At present, U.S. utilities and factories send enough wasted energy in the form of heat up their chimneys to power all of Japan each year.
Industrial energy efficiency technologies, including combined heat and power (CHP) and waste heat to power (WHP), have proven successful in using this previously squandered energy to warm or cool buildings and generate additional electricity. Utilizing this formerly wasted energy has the potential to increase electrical generation efficiency by nearly 80 percent and reduce costs for industrial users. These savings could be used by U.S. companies to invest in other areas, improving their competitiveness, enhancing energy security and storm resilience, improving water conservation, and creating skilled jobs.

“This legislation will help businesses across Pennsylvania save on their energy costs and create jobs,” Senator Casey said. “Making this existing tax credit more accessible will mean that businesses across the nation are using energy more efficiently and saving money in the long run.”

“Combined heat and power and waste heat to power are proven energy-saving technologies that can be used in manufacturing plants, multi-family residences, hospitals, and other commercial and industrial facilities. Thanks to Senator Casey's leadership, the POWER Act would allow more projects to be deployed, improving competitiveness and providing more reliable electricity to Pennsylvania and beyond."

-Ron Frye, vice president – industrial products, Elliott Group (Jeannette, Pennsylvania)

According to studies by the Department of Energy and the Oak Ridge National Labs, significantly increasing industrial energy efficiency can help reinvigorate our manufacturing base by creating as many as one million highly skilled jobs.
Despite their potential, however, the upfront costs of CHP and WHP systems can be expensive, and facilities seeking to lower their energy bills often lack access to the capital needed for purchasing the equipment.  The limits on the size and scope of the current U.S. tax code provision hamper companies from making important investments to increase their efficiency. 
To make the current incentives more accessible and spur investment in energy efficient technology across our country, The POWER Act would place CHP and WHP on par with other forms of renewable energy by expanding tax incentives for these systems and reducing the initial cost of deploying these projects. 
There are currently over 110 public supporters of the POWER Act, including numerous businesses and national organizations and several environmental organizations:  the National Electrical Contractors Association, the Northeast Clean Heat and Power Initiative, the Sheet Metal and Air Conditioning Contractors’ National Association, the Alliance for Industrial Efficiency, Pew Charitable Trusts, and the World Alliance for Decentralized Energy. 
Summary of the POWER Act
The POWER Act proposes to:

  • Increase the ITC for CHP to 30 percent and allow WHP to qualify for the credit;
  • Remove the limit on project size to ensure large industrial systems are eligible;
  • Extend the credit through December 2018 to allow time for equipment purchase, installation, and permitting. 

While technologies such as solar energy and fuel cells currently benefit from a 30 percent investment tax credit (ITC), the incentives for CHP are more limited.  CHP systems are only eligible for a 10 percent ITC for the first 15 megawatts (MW) of projects that are smaller than 50 MW in capacity.  Moreover, WHP does not currently even qualify for the ITC.