U.S. wind energy industry uncertain as PTC indecision continues

In the U.S., uncertainty in the domestic wind energy industry continues due to lack of progress toward renewal of the Production Tax Credit (PTC). According to the American Wind Energy Assn. (AWEA, Washington, D.C.), the PTC provides an income tax credit of 2.2 cents/kilowatt-hour for the production of electricity from utility-scale wind turbines. Set to expire on Dec. 31, the PTC has been renewed in previous years, often at the 11th hour, but as each expiration date approached, wind energy companies have taken remedial actions — layoffs and shutdowns — to ensure survival if Congress failed to act. Under the Obama Administration, the PTC was reinstated for three years, giving wind energy investors, wind farm owners and turbine suppliers some room to breathe. But the 2010 midterm elections, which gave control of the House of Representatives to the Republican party, prompted some doubt, in the wake of what Democratic congressional leaders saw as conservative obstructionism, about whether the PTC would survive its latest 11th hour watch. The U.S. Senate Finance Committee, however, took an important step toward extending the PTC on Aug. 2, 2012, by passing a tax extenders bill, S. 3521, which includes an extension of both the PTC and the investment tax credit (ITC) for offshore and community wind projects. Further, the Republican leadership signaled, initially, a willingness to cooperate “across the aisle” in the wake of President Obama’s re-election. (Notably, challenger Mitt Romney had signaled on the campaign trail the week before his loss that he had softened his stance on the PTC and would be willing to phase it out slowly, a marked departure from his prenomination stance.)

At CT press time, however, legislation still hung in the balance. But there were indications that bipartisan support could be mustered for ongoing wind energy tax credits, according to the AWEA, including a recently proposed bill — introduced on Oct. 20, 2011, by Senator Al Franken (D-MN) — that would replace the renewable energy PTC with a 30 percent ITC for community wind projects.