Charles R. Goulding considers three large 3D printing users that should benefit from restoration: Eaton, GE and Generac.
The February 2021 issue of Barron’s describes these companies’ prospects, and it offers some food for thought through the lens of 3D printing.
Eaton is a large broad-based electrical equipment manufacturer that has a wide range of products that can be used both for replacement and to upgrade Texas to a two-way Smart Grid. We covered Eaton’s 3D printing capabilities in our recent smart grid article. Eaton’s Cooper division has a large lighting business. Texas can reduce overall grid electricity demands by installing much greater volumes of energy-efficient LED lighting.
GE can also be a multifaceted solutions provider in Texas. GE has been in the news because former CEO Jeff Immelt released his new autobiography concurrently with the Texas outage. Immelt was a big proponent of 3D printing and approved GE’s acquisitions of multiple leading 3D printing companies including Arcam. The run-up in oil prices will also benefit GE in the continuing unwinding of its huge Baker Hughes investment interest.
Wisconsin-based Generac is a major manufacturer of standby generators for commercial and residential use. During the Texas power outage, almost 5 million Texans lost power, many for a sustained period. Generac’s CEO commented that they could not make them fast enough. Generac’s Wisconsin facility has already been working full out during the COVID-19 pandemic. The CEO has also stated that these recurring weather events are also going to result in much-needed changes to the entire electric grid.
The Research & Development Tax Credit
Whether it’s used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.
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 U.S. 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 can be used to offset Alternative Minimum tax for companies with revenue below $50MM and, startup businesses can obtain up to $250,000 per year in payroll tax cash rebates.
Sometimes it takes a major crisis to do what needs to be done. The electrical industry, aided by 3D printing, has the technology and the products to address U.S. population electrical grid needs. The isolated disconnected Texas electric grid is inadequate. Texas cannot continue the fast pace of business and population growth without internal investment.