News and analysis about energy in California with an eye toward renewables.

Wind Tax Credit Extended

More of this in 2013 | Photo: Tom Raftery/Flickr/Creative Commons License

The American wind power industry gots its Christmas wish granted a few days late this week, as Congress agreed Tuesday to extend and modify the federal Wind Production Tax Credit (PTC). Originally set to expire this week, the PTC now offers tax credits to qualifying wind turbine installations that break ground before January 1, 2014.

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The extension was part of a number of measures included in the so-called "fiscal cliff" negotiation package passed by a recalcitrant Congress on Tuesday. The package also included an extension of the offshore wind power tax credit.

The PTC extension includes a modification of the previous tax credit rules that's quite favorable to the wind industry: a developer need only begin construction on a project by the deadline to qualify for the 2.2-cent per kilowatt hour tax credit. Before the modification, a facility needed to deliver power before the deadline to qualify.

The change in wording, which was crafted by the Senate Finance Committee in September as part of a tax extenders package, is expected to stimulate a rush of wind power development in 2013, as developers will be able to qualify for the credit while still having more time to plan, finance, and build their projects.

Public reaction to the extension is predictably mixed. "President Obama and clean energy champions including Senator Boxer helped make this a happy holiday for our health and our environment by extending critical tax credits for wind energy," said Sean Carroll of the pro-wind group Environment California. "We applaud our leaders for recognizing these tremendous benefits to our health and environment, and for acting to ensure the continued development of pollution-free wind energy."

Those who are concerned about the proliferation of wind projects in important wildlife areas aren't so happy. "Like so many communities across the United States, Nevada residents are being forced to defend against the permanent impacts of these enormous projects on our environment and quality of life," said Judy Bundorf of Friends of Searchlight Desert and Mountains, which is fighting a proposed wind turbine facility just outside the borders of the Mojave National Preserve in Searchlight, Nevada. "There is no plausible justification for continuing this spending, and certainly not when the nation is facing the huge debt and deficits prevailing today."

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About the Author

Chris Clarke is a natural history writer and environmental journalist currently at work on a book about the Joshua tree. He lives in Joshua Tree.
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Though the extension to January 1, 2014 greatly benefits the wind industry, whose PTC was set to expire at the end of 2012, it also included a provision that could be huge for geothermal development. This provision states that projects under construction by January 1, 2014 would quality for the PTC, rather than the previous rule that required projects to be completed and operational.