Memo: The CEPP Amplifies the Jobs Impacts of the 48C Tax Credit
By Matt Mazewski
Summary and Highlights
President Biden has committed to achieving 80 percent clean electricity by 2030 on the way to 100 percent by 2035, while catalyzing innovation and building U.S. leadership in clean energy manufacturing. Both chambers of Congress have included policies to achieve these goals in the budget resolution framework advanced in August.
Specifically, the reconciliation package currently includes the 48C Advanced Energy Manufacturing Tax Credit for companies that build or retrofit facilities to manufacture clean energy technologies in the United States, and the Clean Electricity Performance Program (CEPP), which would provide incentives for electric utilities to rapidly deploy clean electricity to achieve a nation-wide average of 80 percent clean by 2030.
The macroeconomic analysis in this memo finds that federal investments of $8 billion through 48C, as included in the American Jobs in Energy Manufacturing Act of 2021 introduced by Senators Manchin and Stabenow in March, would directly and indirectly create nearly 140,000 jobs nationwide over the next several years, and would add over $27 billion to GDP.
It also shows that the two policies are greater than the sum of their parts. The purpose of the 48C incentives is to drive innovation and create jobs in the manufacturing sector here in the United States. By increasing demand for clean energy technologies, CEPP amplifies the effect of the incentives and increases the importance of new domestic manufacturing capacity. Our modeling estimates that 48C could directly create 15 percent to 30 percent more jobs if paired with CEPP.
It is clear that these policies are best executed in tandem as they complement and amplify each other’s impacts. To meet our innovation and climate goals, Congress should pursue both.
