The U.S. House of Representatives has already gone on vacation back to their districts and the Senate effectively adjourned for 2013 last Friday, meaning that the one-year extension of the Wind Production Tax Credit (PTC) will expire on Jan. 1, 2014.
The PTC is a $0.022 per kilowatt-hour tax credit on the power that new wind farms in the United States generate for the first 10 years of their operation. These farms have to be “under construction” in 2013 to receive the credit, which is different than how it worked over the law’s prior 20-year history.
In January of 2013, with the legislative fix to the “fiscal cliff,” Congress changed this language from “in production” to “under construction” -- meaning that there is a lot less a farm has to do to qualify for that tax credit. It does not have to be producing power yet, it merely has to have started physical construction or committed 5 percent of the project’s costs by the end of the year to be eligible for the credit. If that change had not been made at the beginning of 2013, a very small number of wind projects would have actually gotten underway, because it takes 18 to 24 months to develop and manufacture most wind energy projects. If Congress had not changed the language in its extension in January 2013, most investors would not have even tried to get projects under way in less than a year.
With the change, though, the industry kept moving. “There’s a race to the start line as opposed to the finish line this time around,” said Mark Albenze, CEO of Wind Americas at Siemens Energy.