Senate committee passes tax proposal that would boost wind energy development

The American Wind Energy Association on July 21 praised members of the U.S. Senate Finance Committee for voting overwhelmingly that day to extend over 50 tax policies through 2016, including the renewable energy Production Tax Credit (PTC) and Investment Tax Credit (ITC) that incentivize the building of more U.S. wind farms.

The committee on a final vote of 23-3 reported out a “tax extenders” bill preserving language that allows wind farms to qualify so long as they start construction while the tax credits are in place. Those credits expired at the start of this year, again throwing the future of American wind energy into doubt once projects currently under construction are completed, the association noted.

“This is a big step in the right direction,” said Tom Kiernan, CEO of the American Wind Energy Association (AWEA). “We applaud the committee’s vote because it recognizes that the vast majority of American voters support these policies and want them continued. We urge the full Senate and the House of Representatives to follow the Senate Finance Committee’s bipartisan lead, and quickly pass this tax extenders package, which will continue to grow American jobs and heavy manufacturing, and support rural economic growth.”

The federal PTC and ITC are predominant drivers of new wind farm development, and have helped lower the cost of American wind power by more than half over the last five years, while making the U.S. number one in the world in wind energy production, the association said.

Senate Finance Committee Chairman Orrin Hatch, R-Utah, in the July 21 hearing regularly acknowledged the strong sense of bipartisan support for renewing the tax extenders package, said the association. Sens. Pat Toomey, R-Pa., Dan Coats, R-Ind., and Rob Portman, R-Ohio, withdrew amendments opposing the PTC, while Sen. Michael Bennett, D-Colo., made the senators aware of the tremendous amounts of economic benefits and jobs wind power has created in Colorado, AWEA said.

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 industry added 23,000 jobs the following year, bringing the total to 73,000 at the end of 2014.

Recently, Sen. Chuck Grassley, R-Iowa, wrote an op-ed renewing his call for Congress to extend the tax credits, saying they “bring certainty to investment that helps boost development, sustainability and expansion of homegrown renewable energy.”

Today, more than 70% of congressional districts contain operating wind turbines, wind-related factories, or both, according to industry data. In June of this year, proposed legislation threatened to eliminate the PTC. That led to 85 companies sending a letter to Congress to protest the bill saying if passed, the bill would “take away an effective, business tax incentive that creates jobs, drives rural economic development and reduces energy costs for Americans across the country.”

According to Wind Vision, a new U.S. Department of Energy (DOE) report released in early 2015, with stable policy wind could supply 10% of the nation’s electricity demand by 2020, 20% by 2030 and 35% by 2050.

The Sierra Club said in a July 21 statement that it applauded the committee’s move to extend the credits for wind projects, but pointed out that solar projects didn’t get the same treatment. Sierra Club Legislative Director Melinda Pierce said: “We applaud the leadership of Senator Grassley in ensuring that Iowa’s booming clean energy sector gets the continued support it needs to benefit Iowa families. Today’s vote provides critical stability for the booming wind energy industry across the country, and gives additional long-term confidence to investors. Unfortunately, this bill does not provide that stability to workers, businesses, and entrepreneurs in the solar industry. This bill leaves solar energy out in the cold by failing to make the Investment Tax Credit more reliable and effective by extending the Investment Tax Credit for solar past 2016. The clean energy economy means new jobs and healthier communities, which is why it is critical to invest in all forms of renewable energy now and in the years to come.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.