Washington, D.C., Sept. 24, 2004 — The American Wind Energy Association (AWEA) said today that the Wind Energy Production Tax Credit (PTC) — a critical factor in financing new wind power installations — will be reinstated through 2005 as part of a major tax package (H.R. 1308) extending a number of individual and business tax provisions. The House and Senate approved the bill, and President Bush is expected to sign it into law. The PTC provides a 1.5 cent-per-kilowatt-hour tax credit (adjusted annually for inflation) for electricity generated with wind turbines.
The PTC, which had expired December 31, 2003, will be extended retroactively from that date to December 31, 2005. AWEA also continues to support a longer-term extension (to December 31, 2006) now included in the corporate tax/JOBS (Jumpstart Our Business Strength) bill (H.R. 4520) still pending before Congress. The JOBS bill also calls for creation of a new tax credit to encourage the use of small wind systems for homes, farms and small businesses.
“The American wind energy industry welcomes Congressional passage of a 15-month extension of the wind energy production tax credit,” said AWEA deputy executive director Tom Gray. “This action by Congress and the expected signature of President Bush mean that about $3 billion in wind energy investments forecast over the next several years are now back on track across the country. More importantly, hundreds of furloughed wind industry employees can now go back to work building and installing new high-tech wind turbines.
“We believe wind energy can provide 6 percent of U.S. electricity by the year 2020, or about as much electricity as hydropower generates today, and this action allows us to go forward toward that goal. AWEA will continue to pursue policies-such as a long-term PTC extension and a renewables portfolio standard (RPS)-that will move the wind industry beyond the boom-and-bust cycles that have resulted from short-term PTC extensions in the past.”
The delay in extending the PTC came following a banner year for the U.S. wind industry, in which it installed a near-record 1,687 megawatts (MW) of generating capacity-enough to serve nearly half a million average American homes. This year, a sharp drop in new installations is expected due to the absence of the incentive for nine months.