Federal Production Tax Credit, Wind Energy Tax Breaks, Set To Expire

From EarthTechling's Lauren Craig:

Over the last four years, the U.S. wind industry has attracted an average of $17 billion in private investment each year. Since 2005, domestic production of wind turbine components has increased twelvefold, with more than 400 plants now operating in 43 states. A large factor in the industry's growth has been the federal production tax credit (PTC), which provides investors in wind energy systems (and other renewable energy technologies) a tax credit equivalent to 2.2 cents per kilowatt-hour (kWh) produced. Originally enacted in 1992, and renewed and expanded several times, the credit it set to expire at the end of 2012. A new report from Navigant consulting finds that extending the PTC is essential to keep the industry growing, and prevent significant job losses.

According to the report, with the PTC in place, the wind industry is projected to create 54,000 American jobs in the next four years, including 46,000 manufacturing jobs. This rate of growth would keep the industry on track to support 500,000 jobs by 2030. However, if Congress allows the PTC for wind to expire, the report finds that private investment in the industry would drop by nearly two-thirds and nearly half of current wind industry jobs would be lost.

"American manufacturing jobs are coming back, with tens of thousands of new jobs from wind power," said Denise Bode, CEO of the American Wind Energy Association (AWEA). "But these jobs could vanish if Congress allows the production tax credit to expire, in effect enacting a targeted tax increase, and sending our jobs to foreign countries. Congress must act now to keep this American manufacturing success story going."

Representatives Dave Reichert (R-Wash.) and Earl Blumenauer (D-Ore.) have introduced legislation to grant a four-year extension of the PTC, which was recently endorsed by a coalition of more than 370 member organizations, including the AWEA. However, tax-based incentives remain controversial, even within the industry.

Related Stories From EarthTechling:
Clean Energy Tax Credit Extension Proposed
Xcel Would Rethink Wind Plans Without Tax Credit
Grid Operators Get Help In Taming Wind Flows
UK Gears Up To Kick Start Global Offshore Wind Industry
German Hybrid-Wind Power Plant Does it All

Comments

[Dan V]

05:11 PM on 01/10/2013

Interesting article. I would agree that with these tax incentives the wind industry will continue to grow. Recently, large corporations have invested substantially in creating wind farms and with improvements to wind blades and manufacturing the efficiency of these wind farms will continue to improve.

[Genders]

10:40 PM on 12/31/2011

Nukes get 500M$ per reactor per year, coal even more, oil gets trillion dollar wars, and they all get 100 times what wind solar and waste bio char get.

No, remove all the fossil and nukes breaks and give them to rooftop solar, offshore wind, efficiency and waste bio char, the ONLY real solutions to our energy problems.,

[AmericanItalian]

01:46 PM on 12/28/2011

I say if you're going to give tax breaks to one you have to give to all. This is inequality on a corporation level.

You give a tax credits or break or even a non-interest loans to a company to help get it started, but if 10 years later it still needs help than maybe it's not the right thing to do.

[Genders]

10:41 PM on 12/31/2011

Fossil and nukes have had 100 and 50 years to prosper....

[LynxAlexiaBlack]

08:55 AM on 12/19/2011

I say extend all subsidies for renewable energy sources and either stop dead or phase out all subsidies for any and all fossil fuels.

[Genders]

10:41 PM on 12/31/2011

LOVE YOU FF!

[BluePhantom2]

06:27 PM on 12/18/2011

Yes it should as should all energy subsidy.

[FullFrontal]

08:24 AM on 12/19/2011

including gas/oil?

[BluePhantom2]

04:54 PM on 12/19/2011

Absolutely! I believe the term is "LEVEL PLAYING FIELD".

[lbsaltzman]

11:35 PM on 12/19/2011

No subsidies for oil and coal. We should only subsidize renewables.

[Kenz300]

11:26 AM on 12/18/2011

Shell has predicted that 50% of the world's energy will come from renewable sources by 2040.

Wind power is growing at the rate of 30% annually, with a worldwide installed capacity of 198 gigawatts in 2010.

Global photovoltaic installations have surpassed 40 GW.

Solar thermal power generates 354 megawatts at the SEGS power plant in the Mojave Desert.

The world's largest geothermal power installation is the Geysers in California, with a rated capacity of 750 MW.

[Kenz300]

11:10 AM on 12/18/2011

We saw what oil supply shortages can do in the 1970's. They produced price spikes, long gas lines, rationing, recession, higher unemployment and business failures. The oil and coal companies have us backed into an energy corner. There needs to be more competition not less.

It is time to end the oil monopoly on transportation fuel. Bring on the electric, flex-fuel, hybrid, CNG, LNG and hydrogen fueled vehicles.

We have put all our eggs in the oil and coal baskets and that is putting our economy at a huge risk. It is time to diversify our energy sources and types. Wind, solar wave energy, geothermal and second generation biofuels made from algae, cellulose and waste all need to be part of the energy mix. We need an all of the above solution.

Capitalism only works when there is competition. Monopolies are only good for the companies and not the consumer. Bring on all forms of energy production and reduce the risk to our economy and national security.

[markkocaldo]

11:11 PM on 12/18/2011

Truly green Solar/wind replacing gas backup with green storage costs close to $2 per kwh - $60K per US household annually. Pie in the sky, wave energy, geothermal and second generation biofuels are even worse than wind solar.

[FullFrontal]

08:27 AM on 12/19/2011

whining about cost doesn't change the validity of his point.

[Kenz300]

10:59 AM on 12/18/2011

Wind, solar wave energy, geothermal and second generation biofuels made form algae, cellulose and waste are the future.

Renewable energy investment is surpassing fossil fuels in new power plants. Electricit­­­­­­­­­­y from sun power, wind energy, wave energy and biomass had an investment of $187 billion last year compared with $157 billion for natural gas, coal and oil, according to Bloomberg New Energy Finance

[markkocaldo]

11:12 PM on 12/18/2011

Lotsa investment no net energy.

[Kenz300]

01:05 PM on 12/19/2011

Wind power is growing at the rate of 30% annually, with a worldwide installed capacity of 198 gigawatts in 2010.

Global photovolta­­­ic installati­­­ons have surpassed 40 GW.

Solar thermal power generates 354 megawatts at the SEGS power plant in the Mojave Desert.

The world's largest geothermal power installati­­­on is the Geysers in California­­­, with a rated capacity of 750 MW

[Bob Pante]

10:33 AM on 12/18/2011

End the subsidies. If wind & solar are so great they will succeed on their own. It'sm called a free market.

[Kenz300]

11:00 AM on 12/18/2011

Big oil and coal have billions in subsidies every year. It is not a free market unless you end the subsidies that oil, coal and nuclear get.

[Bob Pante]

12:36 PM on 12/18/2011

NO THEY DON'T , that is a liberal myth. They get the standard break on investment like any other company, including your solar companies. They make .08 cents a gallon profit on fuel, the Governments takes .60 cents a gallon in tax.

They do less environmental damage than all the cement and roads to operate windmills, and ground covered by solar panels.

I want to see an even playing field.

[Genders]

10:45 PM on 12/31/2011

After 50 and 100 years of breaks to fossil and nukes, you expect solar and green to make it on there own? really?

[OkieMon]

09:06 AM on 12/18/2011

if the fossil fuel fasci*sts had to pay for just 10% of their pollution alternative energies would already be more competititve....

[OkieMon]

09:05 AM on 12/18/2011

tax credit shoudl be increased....

[fallenawayrepublican]

11:19 PM on 12/17/2011

Of course they should not expire, we need to develop every source of energy we can.

[Frank-Landfield]

09:14 PM on 12/17/2011

They should not expire

[Linus521]

12:49 PM on 12/17/2011

Our most endangered ecosystems are terrestrial. Killing ecosystems for wind energies is insanity. The alternatives are only clean and green when utilized where people actually live or in already dead planet infrastructures. Wind produces low energy yield while devouring vast tracts of the Earth's life giving and supporting, physical body or ecosystems, every and all reasons man breathes and exists. Solar should be on rooftops of buildings instead of dead fields of solar panels. As marine ecosystems are more vast, these monstrous, slicing swords, should be placed at sea.

Killing ecosystems kills man's life supporting cycles and functions, whether it is a massive oil spill or a deforested ecosystem for construction of a city; it is all dead planet, regardless. Ecosystems are in the eco-nomy of life itself and are the natural sequestration of the heat trapping gases. Once the soil is disturbed, the gases will be released back into the atmosphere. When they deforest the plant and tree biological diversity, even more heat trapping gases will be released. Each tree stores many pounds of these gases in their oxygen releasing, evapotranspiring, living bodies, cooling the leafs, the soil and the surrounding area.

Killing birds and bats, also kills ecosystems and exposes mankind to emerging disease pathogens upon ecosystem deforestation and death.

[WESmith]

02:01 PM on 12/17/2011

You forgot the thousands of miles of roads that were built to install and service these wind generators. These roads were made on most places out of caliche that contains fine particles. These fine particles are distributed by the wind and cover the ground, not allowing the water to soak in. If it rains in Texas, most of the rain will not be able to naturally soak in on 130,000 square miles of land. These people had a choice to be environmentally-friendly or not. They chose not. Temporary, removable roads have been used for decades. They do damage the environment short term, but the environment does repair itself. The chosen roads are very likely permanent ecological damage.

[Linus521]

01:01 AM on 12/18/2011

Superlative commentary. However, keep in mind, to-date, mankind has never been able to re-create an ecosystem. Therein is the problem. Ecosystems and their biological diversity are life itself. If man kills ecosystems, he kills his only life supporting and life giving team.

[Linus521]

01:18 AM on 12/18/2011

I concur. Roads, solar farms and windmill factories are as ecologically safe as bombs and cities. Sadly, few comprehend how they are killing the Earth. Therein is the problem. Few amongst us are aware, how Earth functions and cycles to create and support all life, and the process of life itself.

[markkocaldo]

02:36 PM on 12/17/2011

According to the NREL solar on every rooftop in America would provide at most 3% of US energy needs at a cost that would bankrupt the country.

[Bob Pante]

10:28 AM on 12/18/2011

3% the first year, it looses efficiency every year.

[idyl]

10:51 AM on 12/17/2011

Onshore wind is already a relatively mature industry, and costs appear to have leveled out. But there is still much needed research and development on offshore wind (larger turbines, ease of maintenance, reducing operation and maintenance costs in harsh marine environments). Production tax credits are a major benefit to further development of industry ... and it appears we are close to reaching full development potential for wind (but are not there yet).

We also need production tax credits and market reforms for things such as pumped hydro, advanced batteries, flywheels, advanced CAES, and other storage technologies ... or else gas becomes the reserve capacity resource of choice (instead of zero carbon storage). So let's look at the big picture too, and not just ask whether wind has done it's job yet or not (or no longer needs subsidies). That seems like a relatively short term view to me, and we need a comprehensive approach.

[Genders]

10:48 PM on 12/31/2011

Offshore wind is well developed by the rest of the world, it's the USA that is behind. Our folks even use old numbers even though the EU has solid modern Numbers Offshore is about the same price per KWH as onshore, even though more expensive, the wind is better.