Senator Chris Dodd Proposes Increasing Investment Tax Credit for Fuel Cells to $3000 per Kilowatt and $3500 per Kilowatt for CHP

Senator Chris Dodd (D-CT) during his tour of FuelCell Energy in Torrington on February 26^th unveiled his plan to promote the use of fuel cells in both homes and businesses. Dodd’s fuel cell plan not only has the potential to create new jobs in Connecticut and across America, but will promote the use of a 21st-century, clean energy resource.

The program also seeks to broaden fuel cells' use in the private sector by boosting the investment tax credit (ITC). Currently, when a business purchases a fuel cell for a highly efficient Combined Heat and Power (CHP) application -- where heat naturally generated by the power plant is used in a related, energy-saving operation -- it is eligible for an ITC of up to 30 percent of the plant's cost (up to $3,000 per kilowatt). The new plan increases the ITC to up to 40 percent of cost (up to $3,500 per kilowatt) for CHP applications.

Many federal facilities are well-suited to the compact, quiet profile that on-site fuel cell power plants represent. Under the Dodd proposal, government agencies would be required to identify qualified locations. FuelCell Energy power plants provide increased power reliability, improved energy security by distributing smaller power plants, and energy independence by utilizing domestic fuel sources. The resulting demand for fuel cell power plants would be expected to drive U.S. manufacturing and create new jobs.

“Connecticut is already a world leader in the production of fuel cells, which reduce consumption of fossil fuels, cut carbon emissions, and save on energy costs by generating power on-site, within the fuel cell unit,” said Dodd, who was joined on the tour by FuelCell Energy CEO Daniel Brdar. “We need to grow the market for these energy-efficient products. If we can create that demand, we can create new jobs today, and a new industry that can power not just homes and businesses, but a new era of Connecticut prosperity.”

Dodd is proposing a three-step plan to kickstart the state’s fuel cell industry and put Connecticut back to work. First, it aims to jump start Connecticut’s fuel cell industry by creating immediate demand for fuel cells – and immediate jobs – by encouraging the federal government to lead the transition to clean energy and fully invest in opportunities where fuel cells can be utilized.

Second, it increases the investment tax credit for fuel cells, encouraging businesses to heat and power their facilities with highly-efficient, Connecticut-built systems. Finally, Dodd’s plan sets an ambitious goal for the residential use of fuel cells – and provides manufacturers and consumers with incentives to meet it.

Senator Dodd thinks the federal government should take the lead in the transition to clean energy. The 2005 Energy Policy Act created a program to help federal agencies purchase fuel cells to meet their electricity needs – but the program has never been adequately funded. Senator Dodd’s plan calls for the program to be fully funded at the authorized level of $100 million. And it requires federal agencies to research which of their facilities would be best suited to receive fuel cells – for instance, facilities that require secure, efficient and clean power where there isn’t enough space for wind turbines or large solar panels.