State moves to put an end to tax credit that has supported wind energy for a decade
Oklahoma will be putting an end to a tax credit that has helped support the growth of wind energy in the state. Currently, Oklahoma ranks third in the United States in terms of wind capacity and generation, largely due to the tax credit that has supported the sector for a decade. Governor Mary Fallin signed legislation this week that will roll back the tax credit gradually through 2027. The short-term impact of this move will be modest, according to fiscal analysts.
Clean energy advocates question why fossil-fuel subsidies are not being rolled back
Per the legislation, wind energy systems must be operational and generating electricity by July of this year in order to qualify for the tax credit. Previously, these projects had until January of 2021 to qualify. Putting an end to the tax credit is part of an overarching move by state lawmakers to close a $868 million shortfall in the state’s budget. The Oklahoma Renewable Energy Council suggests that rolling back the tax credit will have no significant impact on the state’s budget, however. Instead, lawmakers should consider cutting other subsidies, particularly those supporting the oil and natural gas industries.
State’s wind energy sector expected to continue growing despite roll back of tax credit
While the tax credit will fade out over time, its impact will likely be felt for many years to come. The wind energy sector in the state has already gathered impressive momentum, with many new wind projects taking root throughout Oklahoma. Currently, the state has some 3,394 wind turbines that have generated 6,645 megawatts of electricity, which is enough to power 1.8 million average homes. Another 552 megawatts of wind energy capacity is currently under construction and the wind industry in the state has created more than 9,000 jobs.
Oklahoma will remain an attractive market for wind energy
The economic prospects of wind energy will likely continue to make Oklahoma an attractive market even without the state’s tax credit. Wind advocates have expressed little concern for how rolling back the tax credit may affect the sector. They have, however, called into question why other, more generous tax incentives are being allowed to survive when the state is attempting to resolve its budget shortfall.