Investment Environment by Countries – America (2)

published: 2011-01-21 11:52 | editor: | category: Knowledge

The U.S. government passed a new energy bill addressing the importance of the development of the green energy industry and reassuring the determination of making the country greener. The bill defined critical standards such as bio fuel and automotive fuel efficiency. The new bill states fuel consumption of an automobile has to be at least 35 MPG by 2020 as opposed to 28 MPG now.

Renewable energy includes wind energy, solar energy, hydraulic energy, and bio mass energy. Ethanol has the most attention among all bio mass energy sources and is extracted from corns. Ethanol is expected to replace 15% of oil consumption making corn farmers the most benefited group.

President Obama carried out a stimulus plan totaling 787 billion U.S. dollars, of which 150 billion dollars are to be devoted to the development of new energy while allowance for deductable tax for renewable energy increased from 10 billion to 20 billion.

To stimulate consumers’ willingness to purchase hybrid vehicles, U.S. government implemented tax deduction plans. As for light weight hybrid cars, 2500 dollars are tax deductable if the battery system can store 4000 watts and additional 417 dollars are further deducted for every increment of 1000 watts thereafter and the deduction limit is 7500 dollars. On the other hand, as for heavy weight hybrid cars, tax deduction amounts are 10000 dollars for cars weighing 10000 ~ 14000 pounds, 12500 dollars for cars 14000 ~ 26000 weighing pounds and 15000 dollars for cars weighing more than 26000 pounds. The U.S. government will spend 4 billion budgets on these subsidy plans and will spend another 400 million to build infrastructure for charging stations in hopes of seeing 1 million hybrid vehicles on the road.

Besides subsidizing consumers and building infrastructure, the U.S. government also placed importance on technological research and advancement. U.S. Department of Energy devoted 2 billion dollars in subsidy to help the development of battery cells and related components especially those in hybrid car applications.

From corporation’s point of view, companies such as A123System of GE, GM, and Johnson Control have applied for fuel cell subsidies and many state governments such as Massachusetts, Michigan, Kentucky and Indiana have started to cooperate with battery companies to develop local green economy.

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