As everyone in the United States is aware, Congress recently passed a bill to avoid the so-called “fiscal cliff”, a situation in which steep automatic spending cuts and tax hikes would have taken place January first. While the bill is a short-term measure in regards to these main objectives, the deal also had a lot of other legislation packed into it. One of these things is of particular interest to the Wind Energy sector, the Production Tax Credit.
The Production Tax Credit (PTC) is a huge money saver for Wind Energy companies. It allows them to invest in new wind farms and add wind turbines all across the country for a fraction of the price it would otherwise cost. When the PTC has been in place in previous years, the wind energy industry saw some of it’s biggest gains in capacity and productivity.
While the extension of this tax credit is not the long-term extension of three or four years that the Wind Energy industry would ultimately like to see, it is still a step in the right direction to see it extended for the 2013 calendar year. One additional benefit in this year’s extension is the change in criteria to receive the tax credit. In the past, projects had to be completed within the year to receive the tax credit. In this newest agreement, projects only have to be started.
Overall, this is good but not great news for the Wind Energy industry. Wind farms will continue to grow in number and size in 2013, and we will not lose the momentum we gained in 2012 which saw record growth in new electricity added to the grid via wind turbines. This news is also expected to prevent any budget cuts, which could have resulted in job losses across the industry.