As the end of 2012 approaches, firms are scrambling to complete their wind energy projects to prevent the cost of them from spiking when federal wind tax credits expire next year. Wind farm developers have to complete their wind farms before 2013 for the farm cost to be covered (in part) by the tax credit.
“Congress, which last renewed the credit as part of the 2009 fiscal stimulus package, balked at an extension this year,” New York Times reporter Matthew Wald noted. “The tax credit could be equal to one-sixth to one-half of the revenue from the wind turbine, depending on electricity prices in the area of the generator.”
While those that are opposed to the tax credit renewal have focused solely on its costs, wind tax credit supporters “say that the wind production tax credit did not cost the taxpayers any money, because it stimulated economic activity, in the form of manufacturing and construction, that was taxed at the federal, state and local levels.”
We previously wrote about a CEO’s comments on the longevity of wind tax credits and the importance of that to the economy. As noted then, a one-year tax credit is not enough to facilitate the completion of projects, and is barely enough even to complete the construction of a wind farm. This short and intermittent wind tax credit causes economic shock because of the large scale of wind power plants, which hire people and then have to fire them as the projects are ground to a halt due to a sudden loss of funding, which will happen again tomorrow.
The CEO noted above said that it should be extended to 3 to 5 years to prevent this problem from happening, and to give people time to complete their projects.
AWEA’s senior vice president said that the tax credit is likely to be renewed next year, however, he is not certain.
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