Schumer Reveals: Plug Power's Fuel Cells Given Short Shrift by Feds; Schumer Legislation Would Expand Existing Tax Break to Cover Fuel Cells for Forklifts- Could Create Hundreds of Jobs

Press Release

Today, U.S. Senator Charles E. Schumer, joined by Congressman Paul Tonko, revealed that federal tax law gives short shrift to companies like Plug Power that build fuel cells designed for forklifts and other heavy machinery. An existing tax credit provides significant incentives to buyers of fuel cells for cars and trucks, but that credit does not include fuel cells designed for heavy machinery and off-highway vehicles. Today, Schumer unveiled legislation to expand the tax credit so it will cover the GenDrive fuel cells that Plug Power manufactures. Expanding the credit would provide Plug Power and its suppliers with a significant boost and could create up to hundreds of jobs locally and throughout the state. Schumer said that these types of fuel cells are big business and a major part of Plug Power's future.

"We have one of the world's preeminent manufacturers of fuel cells right here, but due to arbitrary federal regulations, it is not able to compete on a level playing field," said Schumer. "That has to change. Fuels cells save energy and help the environment regardless of whether they're attached to a car or a forklift, and they should be treated equally. By leveling the playing field, we have the potential to create hundreds of jobs here in the Capital Region, but also at fuel cell parts manufactures all over the state."

"Fuel cell technology has gained widespread traction in the material handling industry because of the efficiency and productivity gains that are realized," said Congressman Paul Tonko. "Improving incentives for large scale conversions to this clean technology will lead to new investment and new jobs at companies like Plug Power in Latham. I will continue to work with Senator Schumer on these common sense solutions that will create jobs and promote the use of clean energy."

"Senator Schumer's progressive legislation sheds light on the remarkable affects that fuel cell market growth can bring to New York State," said Andy Marsh, CEO at Plug Power Inc. "By helping to commercialize sustainable fuel cell power solutions, thousands of green jobs will be created in manufacturing, engineering and supply chain."

Schumer's proposal would amend section 30B of the Energy Policy Act of 2005- the Alternative Motor Vehicle Credit (AMVC) to expand the definition of "motor vehicle" to include heavy machinery and off-highway vehicles made with fuel cells, like the ones manufactured at Plug Power. The proposal would also require that manufacturers producing vehicles of less 8,500 pounds are eligible for the same tax credit that manufacturers of larger machinery receive. Extending the tax credit to buyers of these fuel cell products would boost an industry that is a proven job creator in New York State. By incentivizing the purchase of these vehicles, the legislation would allow local businesses like Plug Power to ramp up their operations and potentially add jobs. The Department of Energy currently estimates that the domestic fuel cell industry will create 40,000 jobs over the next ten years, but those jobs could be at risk if more domestic producers are not allowed the AMVC credit. Passing the tax credit will mean a break of between $8,000 and $40,000 for buyers.

Plug Power currently houses its national headquarters in Latham where it employs over 100 New Yorkers with plans to hire more. During 2010 the company intends to increase its workforce by 20% and has already begun to emerge as a national leader in fuel cell development. Since 1997, the company has worked to provide clean and renewable energy for customers worldwide by manufacturing fuel cells. Specifically, the company has become a national leader in the manufacturing of fuel cells for alternative commercial and industrial off-highway vehicles like forklifts.

Importantly, the success of companies like Plug Power have ripple effects throughout the economy, and it is important to consider this as the economic benefits of the tax credits are considered. For example, Plug Power spends approximately $1.75 million on a total of 37 NY small business suppliers each year, and this figure is expected to double in 2010 and quadruple in 2011.

Schumer said that this legislation would also benefit a number of other New York companies, particularly the Raymond Corporation in Greene and Onondaga Counties, and Praxair in Tonawanda, in Western New York. Raymond currently employees approximately 1,110 people at their Greene, NY and East Syracuse, NY facilities. Praxair currently employs 1,100 people at their Tonawanda, NY facility. They recently identified green hydrogen production as an area for market expansion and green job growth. Both companies produce fuel cells for heavy machinery.

A fuel cell is an electrochemical device that combines hydrogen and oxygen to produce electricity, with water and heat as its by-product. As long as fuel is supplied, the fuel cell will continue to generate power. Since the conversion of the fuel to energy takes place via an electrochemical process, not combustion, the process is clean, quiet and highly efficient -- two to three times more efficient than fuel burning.

According to assessments by the National Academies and the Hydrogen Technical Advisory Committee, fuel cell technology is not only meeting and exceeding the government's long-term research and development plan, but it is also on track to achieve commercial viability by 2015. As the U.S. considers pathways to achieve aggressive goals for gas and greenhouse gas reductions, it is critical to develop diverse technological options, like fuel cells.

Other countries are aggressively pursuing hydrogen and fuel cells including Japan and Germany, which plan early commercialization in 2015. The U.S. is currently a leader in automotive fuel cell technology, but must continue to invest in this research to remain a leader, particularly in places like the Capital Region. Right now, the region is an emerging national hub for clean energy technologies and is home to production plants like Plug Power that employ many New Yorkers. Passing Schumer's legislation would allow manufacturers like Plug Power to potentially add hundreds of jobs.

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