Federal Regulations Impede Clean Manufacturing Progress in Pennsylvania

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For Pennsylvania business leaders looking to expand their clean manufacturing output, the federal government often seems more like a roadblock than a partner. When companies are ready to innovate, they face lengthy delays and inflated costs, creating significant challenges.

This issue was front and center during a recent House Democratic Policy Committee meeting hosted at E+E Leader Award Winner Vitro Architectural Glass in Allegheny County—the session aimed to uncover the barriers to lowering emissions and expanding clean energy manufacturing.

"Manufacturers highlighted how companies have become greater stewards of Pennsylvania’s resources and how that shift has helped drive job creation and economic growth," said Rep. Ryan Bizzarro, D-Erie, who chairs the policy committee.

Vitro Architectural Glass: A Case in Point

Paul Bush of Vitro Architectural Glass outlined the company’s ambitious $90 million project to restart an idled line for solar panel glass in Meadville. The project promises to create at least 120 jobs with an average salary of $80,000 plus benefits. However, this initiative is at risk due to regulatory delays.

“The start-up of this clean energy manufacturing project and the addition of the new jobs is in jeopardy of being delayed due to the Pennsylvania air permit,” Bush testified. “In October 2023, Vitro applied for the air permit to restart the Meadville float glass manufacturing line via an expedited process through Governor Shapiro’s Action Team, and the process is just now nearing completion.”

Bush emphasized that such delays are a barrier not just for Vitro but for all manufacturing in Pennsylvania. He suggested legislative action to mandate on-site renewable energy for commercial buildings by amending the state’s commercial building code.

Federal Tariffs and Their Impact

Vitro also faces challenges with federal policies encouraging the use of American-made products. The company plans to procure vacuum glazing equipment from China but is hampered by a 25% federal tariff.

“Today, there’s no North American manufacturer of vacuum glazing or equipment manufacturer of vacuum glazing,” Bush explained. “All of the equipment comes out of China and Vitro is looking to purchase some of this equipment to install. There’s a 25% tariff at the federal level…with that large of a capital spend, it’s over $10 million for a tariff. If we can get a tariff waiver or get an offset to that tariff, it would make the decision easier to put that plant and those jobs in Pennsylvania.”

Navigating Federal Grants: Another Hurdle

Doug Gudenburr of DMI Companies, specializing in commercial HVAC projects, highlighted the complexities of navigating the Department of Energy’s (DOE) advanced energy project tax credit process.

“The application process, although seemingly straightforward, caused difficulties for our limited staff. There were deadline changes, website changes, and problems with contacting the DOE help desk,” Gudenburr said. “Although these issues can normally be resolved, there exists a disconnect between businesses who seek funding and the staff of federal and state departments who we seek for help.”

The Inflation Reduction Act funds the tax credit and includes an 184-page guidebook that Gudenburr described as “quite daunting” and “difficult to navigate for staff who are not experts in these fields.”

Legislative Response

While legislators expressed sympathy, they offered limited immediate solutions. Rep. Mandy Steele, D-Cheswick, acknowledged the cumbersome nature of the federal funding application process but provided little concrete relief.

“I hear you saying that the federal funding application process is overly cumbersome — we hear that all the time, we wish we could help with that, but we cannot. However, we certainly can with the state process,” Steele said. “I appreciate you sticking with it in the face of all those challenges.”

Steele emphasized the importance of ongoing communication between businesses and legislators to drive success in Pennsylvania’s clean energy sector.

“Our economic future lies in this area: We are talking about incredible economic opportunity while simultaneously being hugely impactful in the space of the climate crisis, which deserves immediate attention,” she said. “You should be regularly communicating with your legislators at the state and federal level so that we can attack this as a team and be successful in Pennsylvania.”

Understanding the 48C Program

The DOE’s Advanced Energy Project Tax Credit, also known as the 48C Program, is a significant initiative to promote clean energy and reduce greenhouse gas emissions. Here are some key points:

  • Funding and Purpose: Expanded under the Inflation Reduction Act of 2022, the program provides $10 billion in tax credits, with $4 billion earmarked for projects in designated energy communities.
  • Eligibility: Tax credits are available for projects that re-equip, expand, or establish facilities for advanced energy property, reduce greenhouse gas emissions by at least 20%, or process critical materials.
  • Credit Amount: The program covers up to 30% of qualified investment costs for projects that meet wage and apprenticeship requirements; otherwise, the credit is 6%.
  • Application Process: The process involves submitting a concept paper through the DOE’s 48C Portal. If accepted, a complete detailed application will follow.

Pennsylvania’s clean manufacturing goals depend on overcoming regulatory and bureaucratic obstacles, requiring collaboration between businesses and legislators. The state needs streamlined processes and more straightforward guidance to boost its economic future through clean energy.

Environment + Energy Leader