Wind power developers are fighting to secure a tax credit before it expires after Dec. 31. Turbine makers Vestas and Siemens have announced new orders this month from the likes of MidAmerican Energy and Cape Wind, potentially the first U.S. offshore wind farm, who are racing to start projects by year-end in order to qualify for the tax credit.
The 2.3 cents tax credit per kilowatt-hour for the first 10 years of production has helped spur huge growth for the wind industry, according to the New York Times. But Congress has allowed the so-called Production Tax Credit to expire in the past, including 2012, resulting in big drop offs for new installations, the American Wind Energy Association states.
Wind power developers say without a credit in place it will be unlikely they can start new projects because of competition from cheaper energy sources, such as natural gas. The hope was for the credit to be temporary until Congress could fix the tax code, but that does not look likely before the end of the year.
There is some uncertainty for a long-term tax fix with Senator Max Baucus, who chairs the Senate Finance Committee, being nominated to serve as ambassador to China. But his likely successor, Senator Ron Wyden, a Democrat from Oregon, has said he is “not going to support just letting renewables just fall off a cliff,” as he promised comprehensive tax reform would be his priority.
Opponents of the wind subsidy claim it has depressed electricity prices, cut the revenues of other generators and put some competing energy providers out of business. Don Nickles, a former Oklahoma senator who now is an energy policy consultant, said the tax credit has served its purpose of helping a once fledging industry grow up and compete without a subsidy.
“This child is ready to go to college,” Nickles said.
To read the full New York Times article cited in this story, click here