Production Tax Credit For Wind Power Saved, For One Year

January 2nd, 2013 by Tina Casey



Supporters of the production tax credit for wind power can breathe a little easier, at least for now. Whatever else anybody says about the “fiscal cliff” legislation drama, in the end, our friends over at the American Wind Energy Association (AWEA) are sure in a celebratory mood. The final bill, signed by President Obama late last night, includes a provision that extends the production tax credit for wind power for one year.

Not only that, it changes from providing tax credits only to projects completed by the end of the year, to providing tax credits to any project started by the end of the year. AWEA fought specifically for that definition since it usually takes more than a year, and often up to two years, to develop a new wind farm.

Saving the Production Tax Credit for Wind Power

The tax credit was set to expire at the end of 2012. Without a prior guarantee that it would be extended, new activity in the U.S. wind industry had already slowed to a crawl, and many wind power workers had been laid off.

According to a press release issued by AWEA late last night, the future looks far brighter, at least for 2013:

“America’s 75,000 workers in wind energy are celebrating tonight over the continuation of policies expected to save up to 37,000 jobs and create far more over time, and to revive business at nearly 500 manufacturing facilities across the country. The extension of the wind energy Production Tax Credit (PTC), and Investment Tax Credits for community and offshore projects, will allow continued growth of the energy source that installed the most new electrical generating capacity in America last year, with factories or wind farms in all 50 states.”





Last-Minute Drama for Wind Power

Until yesterday, the picture was all gloom and doom for the wind industry. Operation Free, a military veteran-backed organization lobbying for wind power, was especially pessimistic. As recently as December 29, TheHill.com quoted Operation Free’s policy director, Michael Wu:

“Everything in a stopgap package would be geared toward keeping taxes from jumping on the middle class, which is why the AMT (alternative minimum tax) and payroll tax would likely be in but the PTC (production tax credit) wouldn’t.”

However, given the longstanding tradition of taxpayer subsidies for energy production of all types, extension of the tax credit for wind should never have been in doubt.

Part of the reason for subsidizing energy has to do with national security, and since renewable energy will play a key role in future security, bipartisan support is practically guaranteed (more on that later).

It’s also worth noting that the wind industry has adopted a leadership position in promoting wind jobs for military veterans, many of whom possess skills and training that fit a variety of careers in the wind power field.

More to the point, wind energy is not the exotic creature it was up until just a few years ago. It has broken into the mainstream of America’s energy landscape. Even as coal-fired power plants are shutting down, wind power nudged out natural gas for the most new generating capacity installed last year.

Wind power is also projected to provide about 20% of the country’s electricity needs by 2030.

Bipartisan Support for Wind

President Obama has been a strong advocate for public investment in alternative energy, including wind power, and practically all Democratic legislators favored extending the tax credit.

A number of key Republican legislators and governors also supported the tax credit, and last fall they participated in several high-profile lobbying efforts alongside Democrats.

Among the notables was Senator Chuck Grassley (R-Iowa), a strong and early advocate for wind power. In a recent interview with the Toledo Chronicle, Grassley said:

” … [A]s much energy as possible, both traditional and renewable, should be produced at home to create jobs and strengthen national security. Wind energy is a free resource, and it’s abundant in many places around the country … [A] clean renewable source like wind is not dependent on far-away countries with leaders who are hostile to the United States even as they take our energy dollars.”

…Or Not

Unfortunately, last year, many other Republican leaders in the legislature and in the pundit world took a vociferously negative stance against extending the wind power tax credit. It went all the way up to then-presidential candidate Mitt Romney, whose campaign repeatedly affirmed his opposition to extending the credit.

In the end, while the new “fiscal cliff” bill passed the Senate with overwhelming support from both sides of the aisle, it did not even win close to a majority of the Republican votes in the House.

Nevertheless, with a large majority of Democratic legislators voting in favor, the bill passed. And while many Republican legislators in the House failed to support it, they may have some ‘splaining to do in their districts back home, at least to the thousands of Americans — from turbine cowboys to hundreds of U.S. turbine manufacturers — whose livelihood depends on the wind industry.

Image: Wind farm by kevin dooley

Follow me on Twitter: @TinaMCasey









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