Congressman Paul Tonko and Congressman Chris Gibson held a news conference today at Plug Power in Latham to announce the introduction of their bipartisan green jobs legislation in the House of Representatives. The two Congressmen are partnering on a bill to simplify and improve the tax credit for fuel cell-powered industrial vehicles in a joint effort to boost new investments in clean technology and create thousands jobs – many of those right here in the Capital Region. Plug Power is a global leader in providing commercially viable fuel cell technology, including fuel cells for industrial material handling equipment. The changes to the legislation would cover the fuel cells designed and manufactured by Plug Power and other companies and creates a level playing field when it comes to tax credits.

This bill is based on legislation authored by Congressman Tonko last year and introduced in the last session of Congress. Congressman Gibson, who recently toured Plug Power, is supporting the bill as an original co-sponsor.

“With the changes we make in this legislation, we will help companies transition to a clean energy source that will improve productivity and reduce our dependence on fossil fuels,” said Congressman Paul Tonko. “More importantly, we are making the tax credits simple and fair – and provide an incentive that will help fuel cell manufacturers like Plug Power grow and create jobs.  I appreciate Congressman Gibson’s work and support on this issue we will continue to work together to push this legislation forward.”

“I firmly believe that an essential part of our economic recovery is providing businesses with clean, reliable, and affordable sources of power.  Right here in our own backyard is a leader in developing clean fuel cell solutions that will increase our energy independence.  I have been impressed by the existing forklift technology that Plug Power is already manufacturing as well as the potential future applications for a wide variety of business customers.  As fuel cells advance, businesses will be able to access a clean and cost-effective power solution and I look forward to continuing to work with Congressman Tonko on this important effort,” said Congressman Gibson. 

“Plug Power thanks Congressman Tonko and Congressman Gibson for their support of hydrogen fuel cell solutions,” said Andy Marsh, CEO at Plug Power. “During a time when fuel cell funding is experiencing cut backs at the national level, these two individuals recognize the commercial benefits fuel cells deliver today, as well as the impact fuel cells have toward our Nation’s ongoing efforts for energy independence.”

Currently, the tax credit for industrial vehicles is based on a confusing formula intended for technology that provides electricity for stationary property, like a building. Unlike buildings, vehicles have thousands of moving parts that are all integrated and adapted to use fuel cell power as efficiently as possible in a much smaller area. Many new industrial vehicles use highly integrated systems, making it nearly impossible to separate out which individual pieces of the vehicle are part of the “power plant” and eligible for the tax credit and which parts are ineligible. When the credit is applied to something like a forklift, the result is an engineering and accounting nightmare confusing not only for manufacturers and consumers, but also for the IRS. As a result, the current credit goes underused and America loses a valuable manufacturing boost in a clean energy industry where we uniquely competitive in the global market.

Congressman Tonko’s legislation simplifies the tax incentive for fuel cell industrial vehicles by putting the credit back where it belongs – with other vehicles powered by renewable energy resources under the Alternative Motor Vehicle Credit which already exists in Section 30B of the tax code. This credit already covers most vehicles that are powered by clean technology, like hybrids and cars or trucks powered by fuel cells. Rather than going through a complicated back and forth with the IRS and vehicle manufacturers, consumers purchasing these fuel cell-powered forklifts will immediately know the exact amount of their tax credit just by looking at the weight of the vehicle they are purchasing – just like the tax credit for clean energy cars and trucks. Vehicles weighing up to 8,500 pounds will receive a $4,000 credit, plus an additional $1,500 for an energy efficiency rating of 40% or better. The legislation would also restore the full credit of $8,000 for passenger cars, which had been reduced by half at the start of 2011.

Congressman Tonko’s bill also addresses challenges faced by businesses that may not want to purchase an entirely new line of fully-integrated fuel cell forklifts, but rather may want to simply retrofit an existing fleet of industrial vehicles with new fuel cell power, replacing traditional gas or battery power but keeping the structure of the forklift itself unchanged. To meet this challenge, Congressman Tonko’s bill reforms section 48C of the tax code, to apply tax credits based on a vehicle’s Kilowatt capacity. A tax credit of $940 for each 0.5 kW of capacity is provided up to 5 kW. Above 5 kW, additional credits are applied on a graduated scale. The maximum credit under the provision is capped at $12,700 for each vehicle.

These changes to the Alternative Vehicle Tax Credit will provide incentives for companies to invest in fuel cell-powered industrial vehicles, providing a boost to Plug Power and its partners, including vehicle manufacturer Raymond Corp., located in Greene, NY. The material handling market is one of the first robust commercial markets for fuel cell technology, totaling $4 billion per year in North America. Fuel cell-powered vehicles provide dramatically increased productivity in relation to traditional lift trucks because they can be quickly refueled and eliminate the need to store and maintain batteries. Fuel cells also produce constant voltage, so there is no decrease in performance as there would be with electric batteries over a period of usage. Fuel cells also dramatically reduce greenhouse gas emissions – up to 90% when compared to electric battery powered units.

Plug Power currently employs more than 100 people at its Latham headquarters, and has added 20 manufacturing jobs in the past year. Unlike many alternative energy industries, fuel cells are predominantly made in the United States. For every 50 additional fuel cell orders, about one manufacturing job is created on site, with job creation trickling down through the supply chain as well.

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