As Congress considers potential packages extending tax deductions and credits for a variety of businesses, it is crucial that an extension of the renewable energy Production Tax Credit through at least 2015 be included.
A one-year extension would be virtually worthless for the vast majority of the wind industry and the economy. It’s common sense that retroactive extensions do not stimulate new economic activity. An extension through 2014 would leave little more than two weeks for companies to conduct what should be a full year’s worth of business. A handful of companies might be able to initiate a project or two, but for the vast majority of the wind industry, such an extension would be useless.
An extension through only the end of the month would do virtually nothing for wind energy and hurt American workers. After all, when the PTC expired in 2013, new wind installations came to a halt, resulting in a 92 percent drop in new wind projects compared to 2012 and a $23 billion drop in private investment in the U.S. economy. Nearly 30,000 American jobs were lost. We expect similar job losses to occur unless an extension through at least 2015 is passed.
There were some discussions last week about a multi-year phase out, according to several press reports. We have not seen the details of that proposal, and details matter a lot, but a phase out of sufficient length and design that provides an appropriate glide path is something that could work for the wind industry. We would welcome analyzing any proposal that is long-term and fair.
The Production Tax Credit (PTC) has allowed the wind industry to compete with other energy sources that have been subsidized for decades, driving private investment, domestic manufacturing and rural economic development for the U.S. Wind energy now provides over 4 percent of U.S. electricity, powering over 18 million homes nationwide.
For many rural areas, wind has delivered needed economic development – landowners including many ranchers and farmers have received about $180 million in annual lease payments for hosting wind farms. Today, over 500 factories across 43 states manufacture for the wind energy industry. These factories provide well-paying manufacturing jobs for American workers. Any disruption in the PTC now would increase the cost of future wind projects, erasing much of the progress that has been achieved so far.
Seventy-three percent of American voters support the Production Tax Credit, including a wide majority of Republicans. It’s time for Congress to come together on a deal that recognizes this bipartisan support for wind power.