Wind energy industry braces for expiration of Production Tax CreditOctober 25, 2012
Wind energy industry may soon lose support of Production Tax Credit
The U.S. wind energy sector is in danger of losing a strong tax credit from the federal government due to congressional inaction. The Production Tax Credit, as it is called, is a major factor in the growth and success that the wind energy industry has seen in recent years. Backed by this tax credit, U.S. wind energy capacity has exceeded 50,000 megawatts, which is enough to power more than 13 million average homes. A congressional stalemate may put an end to the tax credit at the end of this year, all but eliminating the wind energy industry’s strongest financial support.
Election year causes Congress to stagnate
In the U.S., election year often means little legislative action. Many federal lawmakers are throwing much of their support behind their chosen presidential candidate, while others are taking the opportunity to focus on other legislative agendas that are scheduled for next year. Because of this, the Production Tax Credit is likely to receive little attention, if any, and eventually quietly expire at the end of the year, with wind energy advocates being nearly the only voice on the matter.
Development activity slows
Because the Production Tax Credit may soon disappear, activity in the wind energy industry has slowed to a crawl. The tax credit provides much needed financial support to a wide range of wind energy projects. Without this support, many of these projects simply cannot meet their goals and are likely to be significantly delayed, if not canceled entirely. Some of the most promising wind energy projects will manage to achieve completion thanks to other federal clean energy initiatives, but the majority of smaller wind energy projects may not be so fortunate.
Extension may be possible
There is hope that the Production Tax Credit may be extended. Advocates in the wind energy industry are working to promote the benefits that can be had through investing in the industry. The American Wind Energy Association (AWEA) is campaigning to convince federal legislators to support the extension of the Production Tax Credit for the sake of the country’s economy, suggesting that wind energy could be a powerful force in the country’s continued recovery from financial crisis.