Stimulus "Buy American" Clause Not Working for Efficiency, Now What?

The Department of Energy faces a dilemma. It aims to fund projects that will help reduce power consumption, boost energy efficiency, put Americans back to work and build up what the Obama administration likes to call the clean energy economy. And it wants to do so with a preference for equipment from U.S. suppliers — the Recovery Act provided the DOE’s energy efficiency office with $16.8 billion for its programs and initiatives. But some of the equipment for these projects just isn’t available from U.S.-based manufacturers at large enough scale at this point.

According to a recent notice from the DOE, some grantees for public works efficiency projects, “have encountered difficulties procuring certain manufactured goods,” produced in the U.S. Oops. Now the agency is collecting public comments through next Thursday, February 18, to figure out which categories of equipment — from energy meters to solar panels — should potentially get a waiver on the Buy American provision, which allows exceptions for goods that prove unavailable in sufficient quantity and quality, unreasonably costly or “inconsistent with the public interest.”

The Buy American provision, which extends to not only manufactured goods, but also iron and steel used in stimulus-funded work on public buildings and projects, was a contentious part of Congressional debates over the Recovery Act last year — and it remains so. Critics have called the requirement a protectionist play that could hurt trade relations, while supporters have argued stimulus money should be directed to American firms if the idea is to create jobs on U.S. soil.

Upcoming decisions about whether to waive the requirement for certain goods, and which ones, will affect which greentech manufacturers get to compete for contracts supplying things like high-efficiency lighting systems and controls or photovoltaic systems for public projects — either making the field much tougher for smaller U.S. firms (if a waiver’s granted), or keeping it free of international heavyweights.

The California Energy Commission requested feedback today (it’ll take comments through Tuesday at this address) to incorporate the comments into its response to the DOE next week, explaining that it hopes to determine “what types of equipment are either not manufactured in America, or unavailable as an American product without a significant (over 25%) price premium.”

The commission said it’s “gathering information on what American made equipment is available for efficiency projects, especially for lighting projects.” So if you’re a company selling equipment into this space, now’s the time to pipe up and make yourself known.

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