December 13, 2012

The production tax credit for wind is set to expire at the end of this year and unlike past years, its extension is far from certain so yesterday AWEA argued another six years of the credit would let wind become cost competitive.

          Some parties including Exelon want to see the tax credit expire at the end of this year, arguing that the $22/MWH subsidy distorts energy markets by letting wind farms make money at negative prices.

          AWEA's plan would have the tax credit slowly ramped down over the next six years starting at 100% of the current 2.2¢/KWH next year then dropping to 90% in 2014.  The credit would fall to 80% in 2015, 70% in 2016 and 60% in 2017 and 2018.  The credit would go away after that, said AWEA.

          A six-year ramp down would let the wind industry set up a stable base market in the US that it can build on with further market and technology innovation, AWEA CEO Denise Bode said.

          "We began this process in order to be a part of the solution on our nation's fiscal challenges, while creating needed stability for wind industry development -- both of which are concerns for our industry," Bode said in prepared remarks.

          "We wanted to take this head-on, as part of our patriotic duty as well as our duty to the industry.  We completed the analysis and this is what it identified as necessary for at least a minimally viable industry."

          The lobby's number-one goal is to ensure that the tax credit does not expire immediately and drive the wind industry off its "own fiscal cliff," said Bode.

          AWEA described the phase-out to Congressional leaders in a letter yesterday, saying it would help the country's fiscal situation in the rest of the decade, while ensuring that the wind industry is "minimally viable."