A tax credit that wind energy advocates say is important to sustaining the industry is set to expire Dec. 31. Wind developers say the tax credit is critical to the growing industry. Without it, wind turbine manufacturing can grind to a halt, as it did after the credit expired in 2012.
Advocates say one wind turbine was installed during the first six months of 2013 because of that halt in construction. Construction then picked up in the third quarter of this year.
The wind industry’s production tax credit works like this: Wind producers receive 2.3 cents for each kilowatt-hour of electricity they generate.
Prior to this year, wind projects had to be up and running by Dec. 31 to receive the tax credit. This year, developers only have to start construction or invest 5 percent of the project’s capital (pretty much, order the turbines) before Jan. 1 to receive the credit.
Lindsay North, a spokeswoman for the trade group American Wind Energy Association, said that will help keep the industry moving forward for at least a few months.
“Our industry still faces uncertainty in the medium to long term. It needs Congress to address that next year,” North said.
Critics of the tax credit say opposition is growing.
Ben Cole is with the advocacy group American Energy Alliance, an arm of the oil industry group Institute for Energy Research and has lobbied against the credit.
The Institute for Energy Research recently released a study that says 30 states have incurred net losses to fund the production tax credit.
Cole has said that the wind industry needs to stand on its own two feet.
“We’re sort of hunkered down for the year. We all know [the tax credit] is going to die,” Cole said. “The question becomes: What Capitol Hill conjurer can bring this thing back to life — if at all — in the coming year? We’re going to keep the pressure on.”
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