The recent growth and success of the U.S. wind power industry is attributable in large part to a federal renewable energy production tax credit (the “PTC”) that provides significant tax incentives for investment in and development of wind energy projects. However, the uncertain fate of this credit, which is scheduled to expire at the end of this year, is crippling the growth of the U.S. wind power industry and increasingly sending investors in search of wind development opportunities abroad.
The U.S. wind power industry has experienced tremendous growth over the last decade. According to the American Wind Energy Association (“AWEA”), a wind power advocacy group, the U.S. generated 2.9% of its electricity from wind energy in 2011. Additionally, AWEA reports that the wind energy industry has been able to provide power to the equivalent of over 12 million homes and has fostered economic development in all 50 states. To date, 29 states have legislative mandates that require utilities to use renewable energy to serve a specified minimum percentage (which usually increases over time) of the utilities’ retail customers. The scale and economies of wind power production have also changed dramatically over the recent past. There are now close to 500 manufacturing facilities in 44 states. The wind power industry has been able to reduce the cost of wind power by over 90% since 1980. Over the past five years there has been, on average, private investment of $15 billion annually in the wind power industry. AWEA predicts that by 2030 the U.S. could generate approximately 20% of its electricity from wind power, and that wind power could provide approximately 500,000 jobs in this country.
The PTC has been in effect since 1992 and provides wind farm operators with a tax credit in the amount of 2.2 cents per kilowatt-hour of electricity produced and sold to a third party during the first 10 years of the wind farm’s operation. The PTC has fueled growth of the U.S. wind power industry by providing wind power investors with income tax credits of approximately $2.63 billion annually. However, the PTC is set to expire on January 1, 2013, and to remain available thereafter only to wind farms that have been placed in service by December 31, 2012.
Please see full alert below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.