Wind industry reports strong 2011, pushes for tax credit extension

Source: Nick Juliano, E&E reporter • Posted: Friday, April 13, 2012

The U.S. wind industry posted another year of double-digit growth in 2011 and expects to continue with similar gains this year — but that progress is in jeopardy if Congress does not act soon to extend a key tax break, industry officials warned today.

The American Wind Energy Association released its 2011 annual report today, showing a 17 percent growth in new installations. More than 6,800 megawatts of wind were installed last year, bringing total wind capacity to nearly 47,000 MW or about 3 percent of total U.S. electricity generation, according to the report.

The industry projects similar growth this year, but 2013 remains a huge question mark as developers and turbine manufacturers face the possible expiration of the production tax credit (PTC) that lowers the cost of wind development by providing a 2.2-cent tax credit for every kilowatt-hour generated.

“There are no projects on the table” for 2013 because of uncertainty surrounding the credit, said Elizabeth Salerno, AWEA’s chief economist. “That one factor has stifled future growth and the forward movement of the industry into 2013.”

AWEA CEO Denise Bode credited the industry’s recent growth to the fact that the PTC has not expired for the past five years, and she urged Congress to move quickly to provide another lifeline. The credit is set to expire Dec. 31, but the industry has said since last year that an early extension is necessary so developers and manufacturers have time to refill the project pipeline.

Wind farms typically take 12 to 18 months to be planned, sited and constructed, so an end-of-the-year extension would not be ideal to maximize potential development, industry representatives have argued.

The Senate has already voted twice this year on efforts to extend the PTC, but both failed on party lines. Those measures tied the PTC to more controversial policies, such as reinstating key stimulus programs that Republicans object to or eliminating oil company tax breaks that have broad GOP support.

Bode said today that industry representatives continue to press their case with House and Senate leaders and remain optimistic that the credit could be extended before the August recess, after which lawmakers are likely to be too distracted by their re-election campaigns to get anything done until after November.

She said conversations between industry representatives and Republicans and Democrats on the Hill indicated a broad awareness of “the train wreck that comes at the end of the year if you don’t do anything” and Congress is left with a full plate of appropriations and tax measures. A House PTC bill has about 90 co-sponsors, including 20 Republicans, while three Senate Republicans have lent their name to a PTC bill in the upper chamber. And more lawmakers have said they support the credit than are signed onto the particular bills, increasing optimism that something can happen this year.

“I think there really is bipartisan interest in moving forward,” Bode said.