New Jersey Resources (NYSE: NJR), in a May 3 earnings report, said that construction continues at the Ringer Hill Wind Farm, NJR Clean Energy Ventures‘ (NJRCEV) fourth onshore wind project, which is located along the Pennsylvania-Maryland border in Somerset County, Pa, approximately 60 miles southeast of Pittsburgh.
NJRCEV expects the Ringer Hill Wind Farm to be operational during the first quarter of fiscal 2017. The January-March quarter of this year was the second quarter of its 2016 fiscal year. NJRCEV is investing approximately $84 million to construct, own and operate the wind farm consisting of 14 General Electric turbines, with a total capacity of 39.9 MW.
The majority of the energy produced will be hedged under a 15-year deal with Iron Mountain (NYSE: IRM), a data storage and information management company. When this project is complete, NJRCEV’s onshore wind capacity will total approximately 120 MW, capable of producing enough energy to power 37,500 homes per year.
NJRCEV’s other wind farms include the Alexander Wind Farm in Kansas, Carroll Area Wind Farm in Iowa and the Two Dot Wind Farm in Montana, which have a combined capacity of approximately 80 MW.
NJR noted that in December 2015, Congress passed legislation that extended the Production Tax Credits (PTCs), which are based on kilowatt-hour (kWh) output, at the existing value of 2.3 cents per kWh for wind projects that have commenced construction through December 2016. Projects with construction beginning in 2017 will qualify for 10 years of credits at 80% of the existing PTC value, while projects started in 2018 and 2019 will qualify for 10 years of credits at 60% and 40% of the existing PTC value, respectively. Thereafter, the PTC is scheduled to be eliminated.
In the same bill, the Investment Tax Credit (ITC) was extended at its current value of 30% for solar projects that have commenced construction before December 2019. The credit is reduced to 26% for projects started in 2020, and to 22% in 2021 provided these projects are in service by December 2023. Commercial solar projects started after 2021 are eligible for a 10% ITC, while the credit is eliminated for residential solar projects at that time.
The PTC and ITC extensions are expected to help sustain long-term growth in wind and solar markets in the United States, thereby providing NJRCEV with added flexibility and options to deploy capital for the next several years, the company added.