By voting to pass the 2016 budget, which includes a multi-year extension of the wind energy Production Tax Credit (PTC) and Investment Tax Credit (ITC), Congress secured stability for 73,000 American wind industry workers across all 50 states and private investors helping to grow American wind power.
“We’re going to keep this American wind-power success story going,” said Tom Kiernan, CEO of the American Wind Energy Association (AWEA). “With predictable policies now in place, we will continue advancing wind turbine technology, driving down our costs, and passing the savings on to American families and businesses in all corners of the country. We look forward to building a future with more affordable, reliable, clean wind energy.”
This morning, the U.S. House of Representative voted on a strong bipartisan basis, 316-113, to approve the 2016 spending package. The U.S. Senate followed this afternoon, also with a strong bipartisan vote, 65-33.
As a result, the wind energy PTC and alternative ITC will now be extended for 2015 and 2016, and continue at 80% of present value in 2017, 60% in 2018, and 40% in 2019. As before, the rules will allow wind projects to qualify so long as they start construction before the end of the period.
Industry leaders reacted to the news favorably, saying the multi-year extension supplies their companies with a level of predictability needed to keep U.S. factories open while adding new wind projects to the pipeline:
- “Pattern will be expanding its project development for the coming year because of the PTC extension. Having PTCs for five years will allow us to make more supply commitments and build more projects, creating more jobs. It also allows us to work with the turbine vendors to lower the cost of our projects and minimize the economic impact of phasing down of the credits.” – Mike Garland, CEO of Pattern Energy and Chairman of the Board for AWEA
- “On behalf of the nearly 2,000 Siemens wind-energy employees in the U.S., I applaud Congress for its leadership in providing clear, long-term certainty for renewable energy growth in America. The PTC has encouraged tremendous investment in wind energy, helping to reduce the cost of wind power while simultaneously creating a new American industry. This extension will bolster the continued growth of domestic wind energy and the jobs this growing industry supports, allowing our factories to plan for the future as we continue to deliver innovation that drives down the cost of wind power.” – Jacob Andersen, CEO, Siemens Onshore Americas
- “The long-term certainty the legislation creates for the PTC provides EDP Renewables the opportunity to expand its competitive project development pipeline in the U.S., creating jobs while reducing greenhouse gas emissions, in a country that is at the core of EDPR growth.” – Gabriel Alonso, CEO of EDP Renewables North America
The performance-based PTC has helped to more than quadruple wind power in the U.S. since 2008 – up from 16,702 MWs installed at the start of 2008 to 69,470 MW by the third quarter of 2015. This is enough power to supply over 18 million American homes.
The PTC has helped spur innovation in wind-turbine technology, causing wind’s costs to fall 66% in just six years. The multi-year predictability will help continue that trend and break the repeated boom-bust cycles the U.S. wind energy industry has weathered through two decades of uncertain tax policies.
In 2013, after the renewable energy tax credits were allowed to expire even briefly, installations of new wind farms fell 92%, causing a loss of 30,000 jobs across the industry that year. After Congress renewed the PTC, the U.S. wind energy industry added 23,000 jobs the following year, bringing the total to 73,000 at the end of 2014.
According to the U.S. Department of Energy wind energy can support 380,000 jobs in just 15 years.
Filed Under: News, Policy