Charles R. Goulding and Preeti Sulibhavi dig into the potential use of 3D printing for sourcing the US power grid.
On May 1st, 2020, President Trump signed an executive order declaring a national emergency over threats to the US power system, and taking steps to defend the grid against cyberattacks and foreign interference. The order bans the use or purchase of power grid equipment and components manufactured by a company under the control of a foreign adversary, which could ultimately compromise the security of the nation’s electric grid.
This order has been put into effect after longstanding concern regarding the vulnerability of the power grid to terrorists, hackers, and foreign interests.
For the US 3D printing industry, the timing of this order is critical as the industry is at the cusp of developing 3D printed embedded electronics that the grid needs for the smart grid conversion. Products subject to the order include but are not limited to capacitors, transformers, and smart meters.
It is important to realize that today’s supercapacitors, next-generation capacitors, and smart transformers are data collection devices unlike prior generation grid components.
Although the foreign countries this order is likely aimed at are not named, it is generally understood to include Russia and China.
One company that the US is concerned about is Huawei of China. Although Huawei is normally thought of as a telecom company, smart grid and advanced telecom technology are intertwined, and Huawei has products in the fast-growing energy storage area.
In the US fast-developing 3D printed embedded electronics products are primarily funded by multiple branches of the US military and NASA.
3D Printing For the Grid
Jabil the large electronics contract manufacturer has a large smart meter business segment and is a major user of 3D printing. Eaton Corporation, the large global power product manufacturer, has a product line in all of the areas subject to the recent announcement, in addition to the Additive Manufacturing Center of Excellence in Southfield Michigan.
Now more than ever, US companies developing new and improved utility grid products can take advantage of federal Research and Development Tax Credits.
The Research & Development Tax Credit
Enacted in 1981, the now permanent Federal Research and Development (R&D) Tax Credit allows a credit that typically ranges from 4%-7% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:
- Must be technological in nature
- Must be a component of the taxpayer’s business
- Must represent R&D in the experimental sense and generally includes all such costs related to the development or improvement of a product or process
- Must eliminate uncertainty through a process of experimentation that considers one or more alternatives
Eligible costs include US employee wages, cost of supplies consumed in the R&D process, cost of pre-production testing, US contract research expenses, and certain costs associated with developing a patent.
On December 18, 2015, President Obama signed the PATH Act, making the R&D Tax Credit permanent. Beginning in 2016, the R&D credit has been used to offset Alternative Minimum Tax for companies with revenue below $50MM, and startup businesses can obtain up to $250,000 per year in cash rebates applied directly toward payroll taxes.
The 3D printing industry has a new opportunity to help utility grid suppliers provide domestic products to US utilities. The US power grid needs major infrastructure improvements which may be part of a prospective stimulus program.