Clean Power

Published on December 31st, 2012 | by Nicholas Brown


Firms Scramble To Complete Wind Energy Projects Before Year’s End

December 31st, 2012 by  

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.

Wind turbines via Shutterstock

“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.

Source: redOrbit

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About the Author

writes on CleanTechnica, Gas2, Kleef&Co, and Green Building Elements. He has a keen interest in physics-intensive topics such as electricity generation, refrigeration and air conditioning technology, energy storage, and geography. His website is:

  • Bob_Wallace

    Apparently a one year extension of the PTC for renewables was part of the legislation that just cleared Congress.

    This year at a time stuff sucks. Especially when the Republicans wait until the very last minute. That causes too much disruption for the industry and it is totally unnecessary.

    Republicans are job killers.

  • Jim Nelson

    “as the projects are grinded to a halt…”

    Hey Nicholas, thanks for the story, but could you ran a spell checker before posting your stuff? I grinded my teeth just reading this. Was you drank, or doesn’t you knew what verb forms is?

    • Nicholas

      Hello. Could you please correct it for me? 🙂

  • photosymbiont

    Funny how the coal, oil, gas and nuclear industries all insist on a minimum of ten years for their various tax credits, exemptions, loan guarantees, etc. for the very same reason – to stimulate long-term investment – and oddly enough, Congress always accedes to these requests.

    In addition, the 2005 Energy Act gave a 20-year extension of the Price Anderson Act for nuclear liability protection. Note that if Fukushima had been covered by this Act, the federal government would be on the hook for hundreds of billions of dollars in costs, since the P-A fund only amounts to some $13 billion at present. Nevertheless, large nuclear utilities like Exelon are howling about any extension of the wind tax credit – but would they be willing to eliminate the P-A Act in exchange? Of course not – banks and investors would drop Exelon and similar nuclear utility stocks in an instant if they faced such a liability.

    Similarly, the DOE’s “Clean Coal Power Initiative” is a 10-year program in which the federal government subsidizes 50% of the cost of ‘demonstrating new technologies’ – i.e. building new coal-fired power plants. Not a one-year program that needs yearly renewal.

    The renewable energy industry should get its lobbyists together and demand similar ten-year tax credit / loan guarantee programs for solar and wind (accident liability is not much of an issue here). The fossil fuel and nuclear industries in years past used, as their justification for such programs, the ‘energy security of the United States’ – so why not use the same argument for renewable energy production?

    • That would make too much sense Photo and the people that we send to DC to oversee the bureaucracy quit making any sense some time ago. I think that legalized bribery might be involved…, I mean campaign contributions. Yea, thats the ticket…

    • “Funny how the coal, oil, gas and nuclear industries all insist on a minimum of ten years for their various tax credits, exemptions, loan guarantees, etc. for the very same reason – to stimulate long-term investment – and oddly enough, Congress always accedes to these requests.”
      -Oy, exactly… horrible double standard.

      Your 2nd paragraph — Wow, that’s something… will have to remember to bring that up in an article.

      The renewable energy lobbyists do a pretty good job of making the case for their subsidies. However, what they don’t do is spell out the subsidies their competitors are getting (as you just did). They should really focus on that more, I think, to make it 100% obvious how unfair & stupid it is to oppose renewable energy subsidies.

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