Washington (Platts)--8Jan2010/544 pm EST/2244 GMT

The Obama administration on Friday touted $2.3 billion in economic stimulus funding for clean energy manufacturing tax credits, even as the Department of Labor earlier in the day reported a loss of 85,000 jobs across the US economy.

"I don't want the industries that yield the jobs of tomorrow to be built overseas," President Barack Obama told reporters at the White House. "I want the United States of America to be what it has always been: a leader, the leader, when it comes to a clean energy future, and that is exactly what this Clean Energy Manufacturing initiative will help us do."

The Advanced Energy Manufacturing Tax Credits program was announced in August, and the Department of Energy and the Department of the Treasury have been reviewing applications since then. The $2.3 billion in awards detailed Friday will be matched by $5.4 billion in private sector investment, the White House said.

Under the program, facilities that manufacture equipment for clean energy projects -- including fuel cells, renewable fuel refineries, smart grid technology and solar components -- are eligible for an investment tax credit of 30%.

The program is aimed at manufacturers and does not cover energy generation projects, according to DOE. The program is funded by 2009's American Recovery and Reinvestment Act, and the White House said it would lay the foundation for a renewable-energy manufacturing industry that will allow the US to compete with manufacturers around the globe.

While the US economy continues to lose jobs, the White House hopes this program will help turn that around by creating "tens of thousands" of jobs. Overall, the program provides tax credits for 183 projects in 43 states.

Some of the biggest tax-credit winners were Hemlock Semiconductor, which received $142 million to expand production of a component of solar cells; United Technologies, which got $110 million to upgrade a Connecticut plant to make more fuel-efficient jet engines; and Alstom, which got $63 million for turbines to be used with advanced nuclear power plants.

In December, Obama asked Congress to provide an additional $5 billion for the program because of the large number of worthy applications.

DOE received about 500 applications, worth about $8 billion, in October, a senior Obama administration official told reporters. Each application was looked at by five reviewers, he said.

"At the end of the day, what we are talking about today is creating 17,000 jobs and re-establishing US leadership in high-technology, clean-energy manufacturing," the official said, adding that the tax credits will attract companies that can build plants anywhere in the globe to do so in the US.

The winners also included some companies that have headquarters outside the US, but are applying for tax credits for facilities in the US, the official said. This includes the largest tax-credit award -- $150 million -- which went to German-owned Volkswagen for a $1 billion plant in Tennessee to build the company's clean diesel vehicles.

The Obama administration's $787-billion stimulus package also provides billions of dollars in grants and tax credits for investment in renewable-energy projects, such as solar power plants and wind farms. Feeding those projects the wind turbines and solar cells they need to be built is a fundamental driver of the tax credits announced Friday.

"One of the things we are quite conscious of is that as we grow demand in this country, we also make sure we grow the manufacturing capacity to supply that demand, and keeping that in balance across the whole supply chain becomes important," the official said.

The Obama tax credit program did have some critics, however. Thomas Pyle, president of the Institute for Energy Research, blasted the program as subsidizing an industry that cannot support itself. IER is a pro-free market research group.

"All the President did today is throw more money at an unproven technology that is not economically viable in the marketplace," he said. "If the President really wants to create an environment that will foster economic growth and job creation, he need not look any further than the domestic oil, gas and coal industries."

--Derek Sands, derek_sands@platts.com