Will the Wind Tax Credit Be Allowed to Expire?


The wind industry reached a milestone earlier this year by exceeding 50,000 megawatts (MW) of generation capacity for the first time. However, the future success of the wind industry largely hinges on legislative efforts to extend the wind production tax credit (PTC), which is set to expire in 2012 The federal subsidy provides a 2.2-cent per kilowatt-hour credit to wind energy producers.

The American Wind Energy Association (AWEA) attributes much of the industry’s third-quarter growth to the tax credit. Installations of new wind electricity capacity rose by 1,833 megawatts during the quarter, according to AWEA. Installed capacity has increased 40 percent through the quarter compared with 2011, it stated.

Despite these gains, the role of the federal governments in funding power sources like wind and solar farms remains a highly controversial issue. Supporters of the PTC argue that wind power is a wise investment, pointing to the jobs created by the industry as well as the environmental benefits. They maintain that while the industry is taking off, it still needs help to compete with established sources of energy like coal and natural gas.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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