Federal Renewable Energy Production Tax Credit
The wind industry continues to seek long-term tax policies, lasting more than just a few years, to provide consistency and market certainty. The federal renewable energy production tax credit (PTC) has been the primary financial policy for the wind industry since its inception in 1992. Through the years it has been extended mostly in one- and two-year intervals, and even been allowed to expire. Congress provided a three-year extension of the PTC through December 31, 2012, as part of the American Recovery and Reinvestment Act. The PTC provides an inflation-adjusted per kilowatt hour
(kWh) income tax benefit over the first ten years of a wind project’s operations, which in 2010 was 2.2 cents per kWh, and is a critical factor in financing new wind farms.
The industry believes an extension of at least four years is crucial. According to the American Wind Energy Association (AWEA), failure to extend the PTC will lead to significant job losses and roll back progress that has been made nationally to diversify the U.S. electricity portfolio. AWEA advocates that predictable policies will improve investment in the wind industry. This investment includes R&D into lighter, stronger, larger and more diversified wind turbines in which composite parts are heavily used; ranging from blades, nacelles, platforms and other components.