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Time Running Out on Wind Tax Credit

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Turbines in North Palm Springs | Photo: Nemo's Great Uncle/Flickr/Creative Commons License

The controversial Wind Production Tax Credit is set to expire in just 11 days, but efforts to extend the credit in Congress are in limbo, wrapped up with complex negotiations over the so-called "fiscal cliff."

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The expiration of the credit, which gives wind power producers 2.2 cents per kilowatt hour of electricity produced, is seen as a Mayan-style end of the world by wind industry supporters, and a chance for a sigh of relief by activists fighting new wind power installations in places like Ocotillo, California.

"With the threat of the PTC's expiration, wind project developers are not making plans in the U.S. and American manufacturers are not receiving orders," David Ward of the American Wind Energy Association (AWEA) told ReWire. "Job layoffs have started already, which could total up to 37,000 jobs lost. Without an immediate extension of the Production Tax Credit, the wind industry is facing the recurrence of the boom-bust cycle it has seen in previous years when the PTC was allowed to expire."

A measure that would extend the Production Tax Credit was introduced in Congress in August, but it's one of a package of almost two dozen such measures that are being used as poker chips in the negotiations over the fiscal cliff issue, according to Dirk Lammers at Bloomberg.

AWEA's chair Denise Bode told Congress last week that her group would find a phased-out PTC lasting an additional six years acceptable. That move riled some renewable energy experts, including Grist's Philip Bump, who observed:

Neville Chamberlain would be proud. There is no better way to negotiate than to accede to a tremendously weak position early in the process. Opponents of the PTC are unlikely to accept this position as-is, and will instead push for a faster, more severe reduction, making AWEA's already-bad position even worse. And AWEA concedes a key conservative talking point: that the PTC isn't needed, that wind can compete on a lopsided playing field in a few years. That's probably extremely optimistic.

This proposal is also hugely damaging to other renewable energy sources, like solar, which have production tax credits expiring at the end of next year. How will the solar industry defend its extension -- an extension which, again, used to be routine -- if the wind industry has set a standard of a gradual phasing out?

One could ask the same question about the geothermal tax credit as well.

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For ongoing environmental coverage in March 2017 and afterward, please visit our show Earth Focus, or browse Redefine for historic material.
KCET's award-winning environment news project Redefine ran from July 2012 through February 2017.

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