Tax Credit Extension Crucial to US Clean Energy Growth, Manufacturing & Jobs Revival

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Graphic courtesy AWEA

The US wind energy industry can create and save 54,000 jobs, including expanding the wind energy manufacturing sector by 1/3 to 46,000 jobs, according to the results of a studycompleted by Navigant Consulting. That’s given a stable federal tax policy that includes extending the existing wind energy production tax credit (PTC) for another four years. Unfortunately, the US hasn’t had a stable clean/renewable energy tax policy.

First enacted as back in 1992 as part of that year’s Energy Policy Act, the wind energy PTC provides a 2.2 cent per kilowatt-hour tax credit for the first ten years of electricity production from utility-scale wind turbines. It’s been extended four times, and it’s been allowed to “sunset” three times, recounts the Union of Concerned Scientists. The “on-again, off-again” tax policy of the federal government has led to a cycle of boom-and-bust in the wind energy and other renewable energy industries that’s compromised and hindered their development and growth.

Wind Fueling US Job Creation, Manufacturing Revival

The PTC has been central to the wind energy sector becoming one of the fastest growing in the US economy. US domestic production of wind turbine components has grown 12-fold at now more than 400 facilities in 43 states with the PTC in place over the last six years, bringing highly valued manufacturing jobs back to the US, the AWEA points out.

With the wind energy PTC due to expire again at the end of 2012, the American Wind Energy Association (AWEA) is urging lawmakers to extend the PTC for another four years, and it’s embarked on an ambitious campaign of public and Congressional outreach to help make that happen.

Today’s publication of the Navigant study at a press conference in Washington, D.C. is the association’s highest profile effort yet. Wind energy manufacturers with facilities in Illinois, Iowa, Kansas, North Carolina, South Carolina and Florida joined AWEA at the press conference.

Enacting a four-year extension of the PTC will keep the US wind energy industry on track to supporting half-a-million jobs by 2030, a statistic projected in a US Dept. of Energy report completed during the G.W. Bush administration, the AWEA noted.

Still a year off, the expiration of the PTC is already having a negative effect on wind energy project planning and business development. Permitting and zoning for wind energy projects alone can take two years or more to see through. Project developers are reluctant to undertake new projects if there’s uncertainty regarding the existence of the PTC, an effect that’s been well-documented by the AWEA.

The Likely Effects of a Wind PTC Sunset

“We have made a significant investment during the last three years creating several hundred jobs for the state of Illinois to support the wind industry domestically,” said Terry R. Royer, CEO of Winergy Drive Systems Corporation.

“With the uncertainty of the PTC extension, we are seeing the hesitation of our customers to make continued commitments for orders in late 2012 and 2013. An immediate extension is needed to support the investment we have made in our operations and secure the jobs that have been created.”

US wind energy jobs would fall off 50%, a loss of 37,000 jobs and a 1/3 cut in wind manufacturing jobs, should the PTC be allowed to expire, Navigant determined. Private investment in the wind energy industry would drop by 2/3. Extending the PTC for another four years, on the other hand, would result in the creation of 17,000 American jobs, Navigant found.

Wind Energy PTC Extension in the House

“American manufacturing jobs are coming back, with tens of thousands of new jobs from wind power,” said Denise Bode, AWEA CEO. “But these jobs could vanish if Congress allows the Production Tax Credit to expire, in effect enacting a targeted tax increase, and sending our jobs to foreign countries. Congress must act now to keep this American manufacturing success story going.”

A coalition of more than 370 members, including the AWEA, the National Association of Manufacturers, the American Farm Bureau, the Edison Electric Institute, the Western Governors’ Association, the United Steelworkers union and environmental groups are supporting bipartisan legislation calling for a four-year extension of the wind energy PTC recently introduced in the House by Rep. Dave Reichert (R-WA) and Earl Blumenauer (D-OR).

The “American Renewable Energy Production Tax Credit Extension Act” (H.R. 3307) would extend the PTC for the production of wind, geothermal, hydropower and other forms of renewable energy through 2016.

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