Wind’s banner 2012 is followed by woes in 2013 amid policy uncertainty — DOE

Source: Katherine Ling, E&E reporter • Posted: Wednesday, August 7, 2013


Published: Monday, August 5, 2013

The Nebraska Supreme Court has ruled that a wind company can claim a $1.6 million tax credit to avoid paying higher taxes over the next several years, striking down a lower court’s ruling that the credit was unconstitutional.


Last week’s decision allows Elkhorn Ridge Wind to pay a lower property tax. The ruling upheld a 2010 state law that enables wind farms to pay a 20-year nameplate capacity tax on their properties instead of a higher personal property tax that must be paid out over five years.


The Knox County Board of Supervisors supported the change but sued to force Elkhorn Ridge Wind to pay both taxes under an agreement that was reached before the state law was passed three years ago.


But the court ruled that the energy company could apply its wind credit to its new 20-year tax without also having to pay the higher short-term property tax.


“The nameplate capacity tax was clearly intended to be instead of, and not in addition to, the personal property tax on wind energy generation equipment,” the court said in its ruling. “But without the credit, Elkhorn Ridge would be required to pay both personal property tax and the nameplate capacity tax on the same equipment” (Grant Schulte, AP/Houston Chronicle, Aug. 2).

Wind energy was the fastest-growing source of electricity in the United States last year, installing enough capacity to power 15 million homes, the Energy Department announced today.

It accounted for 43 percent of all new U.S. electric generation capacity and $25 billion in new investment in 2012, the annual DOE wind market report says. The report was prepared in partnership with the Lawrence Berkeley National Laboratory.

The United States added 13.1 gigawatts of new wind capacity last year, which was more than any other country and 90 percent higher than in 2011, DOE said. Total U.S. wind power capacity is now more than 60 GW.

The report also found that 72 percent of last year’s installed turbine equipment including blades, gears and generators was manufactured in the United States, and the industry is now estimated to employ about 80,000 people — 5,000 more than in 2011.

But DOE warned that uncertainty about tax incentives and other supportive policies is hurting the wind industry. The report predicts 2013 will likely be a slow year for new capacity additions. But it says 2014 will be a more “robust” year, as there are projects that will start this year and come online next year because of tax incentives renewed at the last minute in January.

“That’s why the Obama Administration has called for the extension of the production tax credit which has played a vital role in the development of this clean, renewable energy source,” Energy Secretary Ernest Moniz said in a blog post on DOE’s website. “We’re also working to upgrade our electric grid to provide reliable, affordable clean energy to more and more Americans.”

A report from the American Wind Energy Association released last week found that only 1.6 megawatts of new wind power came online in the first half of 2013, with no new wind turbines built in the second quarter (ClimateWire, July 31).

Congress allowed wind’s production tax credit of 2.2 cents per kilowatt-hour to expire Dec. 31, 2012, before renewing it Jan. 1 through the end of this year. To be eligible, projects must start construction, not complete it, by the end of 2013, which the Energy Information Administration said means wind installations will be 34 percent higher than they otherwise would have been by 2016 (E&ENews PM, May 22).

Along with the annual “Wind Technologies Market Report,” DOE released a companion analysis of the wind “distributed” market, which has grown more than fivefold in the past decade, DOE said. The Pacific Northwest National Laboratory partnered with DOE on this second report.

Smaller wind turbines installed to supplement or provide power for farms, homes or commercial sites totaled more than 812 MW last year from 69,000 units across all 50 states. Iowa, Massachusetts, California and Wisconsin led the nation in new distributed wind power capacity in 2012.

Texas led the nation overall with 1,800 MW of additional wind capacity last year, and now has more than 12 GW total, which is twice as much as second-place California, the report says. Nine states rely on wind power for more than 12 percent of their total annual electricity consumption, with Iowa, South Dakota and Kansas relying on the source for more than 20 percent, DOE said.