Dec 24, 2012 — Uncertainty over the future of production tax credits for wind energy producers has lead to a major industry slowdown. Now, the tax credit's fate is bogged down in Congressional "fiscal cliff" negotiations.
For wind energy producers, the looming expiration date for the production tax credits, or PTCs, is getting even closer.
The current tax incentive - a credit of 2.1 cents per kilowatt-hour of energy produced - is set to expire on Jan. 1 if Congress doesn't renew it.
Now, the PTC's fate is tied up in the bundle of Congressional budget negotiations.
"We're thinking about half the jobs in the industry that depend on us being in this package they're gonna pass to avoid going over the fiscal cliff," says Peter Kelley, spokesperson for the American Wind Energy Association.
Last week the industry group presented an analysis to Congressional leaders. They argue that if they get the tax credit renewed this coming year, they'll be able to phase out the subsidy by 2018.
We started that process last spring to imagine a future where there was no tax incentive for wind energy," Kelley says. "We did an elaborate economic analysis of many different factors including the price of energy and demand for energy and how much wind can be built each year over the next several years."
Their ultimate recommendation: "Extend it now as it is for projects started next year," says Kelley, "and then we can figure out the whole energy landscape during tax reform."
Meanwhile, the American Wind Energy Association's CEO, Denise Bode, announced her resignation last week.
And everyone else is waiting to see what will happen.
"We're all on the edge of our seats. Or to put it another way we're on the edge of our own fiscal cliff," Kelley says. "If this is successfully passed in the next two weeks as we're still expecting, there will be a huge celebration and we'll get about building some wind farms and putting people back to work. If not then we'll continue to be on hold through the new year because it would indicate that Congress is punting this into the next congress and that's not a very good outcome."