The bill creates incentives in four critical areas and it enhances incentives for combined heat and power systems. One incentive is a $120 per horsepower tax credit for manufacturers that incorporate advanced motor systems — those that offer variable or multiple speed operation and use a set of approved technologies — into new or redesigned appliances, machines, or equipment.

The bill also creates an Industrial Process Water Use Project Credit for investments in reuse, recycling, and efficiency measures for industrial and manufacturing facilities.

A new incentive for replacing old chillers that harm the atmosphere will be established. The bill establishes a credit of $150 per ton, plus an additional incentive of $100 for each ton downsized during replacement.

Finally, the bill improves upon the incentive for combined heat and power systems that Congress enacted in 2008. By expanding the credit’s applicability from the first 15 megawatts to the first 25 megawatts of system capacity, and removing the overall system size cap of 50 megawatts, it will allow a greater number of combined heat and power projects to be financially viable and move forward.

Taken together, these four industrial energy efficiency incentives capture a large portion of the energy efficiency potential in the industrial sector, catalyzing new technology deployment to decrease carbon emissions and help protect natural resources.

Publication date: 10/8/2012