Tax Credit Critical to Continued Growth of Wind Power, Association Says
The American Wind Energy Association (AWEA) said Wednesday that while the wind power industry is gaining momentum in Illinois, Iowa, Michigan and Ohio, expiration of a key tax credit could curtail future projects and trigger massive lay offs in the Midwest and elsewhere.
In its Annual Market Report, released earlier this week, AWEA indicated the Midwest continues to generate and consume greater amounts of wind power, with Illinois ranked fifth among states involved in construction of wind-related projects and Iowa ranked second among states that consume wind power, as a percentage of their portfolios.
The report also indicates that the number U.S. wind power installations rose by 31% in 2011, for a total of 46,916 megawatts (MW) to date.
However, AWEA officials warned that pending expiration of the federal Production Tax Credit (PTC), a provision of the American Recovery and Reinvestment Act of 2009, could reverse recent gains.
“Traditional tax incentives are working. We're creating jobs and delivering clean, affordable energy,” said AWEA CEO Denise Bode. “But we will lose these benefits if Congress allows the PTC to expire. Businesses need certainty. That's why it's urgent to extend the PTC now.”
By providing an income tax credit of 2.2 cents/kilowatt-hour for utility-scale wind power, the PTC leverages as much as $20 billion per year in private investment and supports tens of thousands of jobs, according to AWEA.
A House bill seeking to extend the existing PTC for wind energy beyond its Dec. 31, 2012 deadline has garnered the support of 90 cosponsors, including 20 Republicans. Extension legislation was introduced in the Senate on March 15.
According to study released Wednesday by Pew Charitable Trusts, federal support for renewable energy was instrumental in helping the U.S. reclaim its title of world's largest investor in clean energy last year, with private investment totaling $48 billion, as compared to $45.5 billion in China and $31 billion in Germany.
However, Phyllis Cutino, director of Pew's green energy programs, told CNN that while other countries have long-term policies in place to promote consistent growth of renewable energy, “We don't have that.”