Chris Fish of McAllister & Quinn on Government Incentives for Solar Manufacturers
(part 1/2 - part 2 below)
Chris Fish, Vice President of Washington DC based government affairs firm, McAllister & Quinn, gave solar professionals at this years InterSolar great insight into federal and state government incentives for PV manufacturers. Chris was a great choice to lead this discussion since he leads the technology and renewable energy practice at McAliister and Quinn and has two decades of experience working for numerous Members of Congress as a senior staff person and a Chief of Staff.
In Chris' opinion, clean tech is a very exciting sector for government officials, placing clean tech companies at the forefront for government funding opportunities. When going for government funding, there are two very different groups of government officials that you will deal with: program managers and elected officials/ political appointees. These two groups will respond to you in very different ways. Program managers will understand your technology and the science behind it, and they will want to review it in great detail. They will focus on reviewing your technology, your roadmaps and your milestones. On the other hand elected officials and political appointees will not understand the technology in the same way as the program manager. You will have to communicate with them in layman's terms. Most important to them will be job retention and job creation, enabling US companies to compete in the global market space and growing new industries and technologies within the state.
Key Points When Dealing with Elected Officials:
1. Temper Your Personal Politics. Look at Governor as business partner and investor, not as a politician.
2. Every state wants a clean tech economy, so if you're doing clean tech you're in a good position for money compared to other manufacturers in the state.
3. Job retention vs. Job creation - If you are creating jobs you are in a better position when trying to impact politicians.
4. Already in state vs. moving into state - larger opportunity for those moving into a state. Again think in terms of job creation vs. job retention.
5. Creation of a new industry - government officials like that.
6. Have Realistic Expectations - There is only $117M in DOE stimulus money, and you have to be realistic about how much of that money you can get. For example, if you need $50M, you may not get all of it from government money.
7. You will get more money out of government for building manufacturing facilities than you will for Research & Development
8. Think of Federal Government incentives when looking for assistance with R&D, and think of the State and Local Government incentives when looking for assistance with Manufacturing and Factory building.
9. Federal Incentive RFP Process - Check out www.fbo.gov, a clearing house of all the RFPs available through the federal government.
10. Try to target some of these R&D programs, and when possible meet with program managers before you look at an RFP. These RFPs are very cumbersome, and it may be more worth your time to speak with these program managers about your project and see if you have a project that potentially can fit when an RFP actually does become available.
11. Congressional Appropriations and Earmarks - Dollar Amounts vary and more powerful members have a better opportunity to secure an earmark.
Top Renewable Energy Funding opportunities:
1. Investment Tax Credits for Renewable Energy
2. Real Property Tax Abatement
3. Research and Development Tax Credits
4. Federal Small Business Funding for Tech (Under 500 employees with VC ownership of under 49%) - SBIR (Small Business Innovative Research Grant) and STTR (Small Business Technology Transfer Grant) - R&D programs set for every federal agency with an R&D budget. Roughly 2.5% of their budget set aside to fund these programs. A lot of money here, so you should look into them.
5. Funding Incentives from State and Local Governments - Check out www.dsireusa.org, a database showing State Incentives for Renewables and Efficiency.
6. County Government Industrial Development Authority Organizations - depending on where your manufacturing is located, they can help you with bonding authority.
7. State Pension Funds - A number of states working to review renewable energy companies for their state's pension fund.
States can assist with 20% or more of funding necessary to construct a manufacturing facility. So how do you maximize the grant amount offered by a state government? Chris suggests having term sheets and commitments for needed non-state funds with you when you approach a state for incentive. The number of companies coming in without any private sector funding is pretty high, and the number coming in with term sheets and commitment is lower. States are going to be looking at the second category in more detail. Also, remember that incentive money is not given completely upfront, but is instead incrementally released to you as the project is developed and objectives are met.
Chris was part of the "Growth Opportunities in the New PV Market: Projects, Finance and Policy" event at the 2009 Intersolar Conference.
This event was filmed by buildaroo.com and was produced by Greentech Media in partnership with the Prometheus Institute.