Four U.S. senators have introduced legislation that would require payouts from the American Recovery and Reinvestment Act's (ARRA) Section 1603 program, which gives developers a 30% cash grant in lieu of federal tax credits, flow only to projects that rely on materials manufactured in the U.S. and create the bulk of their jobs here at home, rather than overseas.
The senators cite a study by the Investigative Reporting Workshop that has also received national TV news coverage. It claims that since September 2009, 79% of the $2 billion in grants issued by Section 1603 have gone to foreign wind companies.
The Senators' new legislation would stop payments to projects such as a proposed 648 MW, $1.5 billion Texas wind farm, which is a joint venture comprised of China's Shenyang Power Group, Texas company Cielo Wind Power and the U.S. Renewable Energy Group.
Not surprisingly, the American Wind Energy Association says the proposed legislation is misguided. AWEA claims it would torpedo job creation efforts of ARRA.
"At a time when the construction unemployment rate is nearly 25% and the manufacturing unemployment rate is 13%, this proposal would cost 50,000 American workers their jobs," say AWEA CEO Denise Bode.
Under the "Buy American" provision contained in ARRA, government projects financed in part by the stimulus must, with few exceptions, rely on iron, steel and manufactured goods produced in the U.S.
The proposal announced by the four senators would apply the "Buy America" standard to all renewable energy projects that seek stimulus funds. The proposal also would ensure that grant money is distributed only to renewable energy projects that preserve and create jobs in the U.S.
AWEA says the U.S. lacks the capability to produce 100% of its wind turbine components domestically. However, more than half of the value of the wind turbines used in U.S. wind projects is domestically produced, and that percentage is rising annually as more turbine makers add U.S. manufacturing capability.
You can read the AWEA counterargument here:
You can see the letter to Treasury Secretary Geitner here: