U.S. Congress has voted to extend the wind energy Production Tax Credit (PTC) and Investment Tax Credit (ITC). On Friday morning, the U.S. House of Representatives voted to approve the 2016 spending package and that afternoon, the U.S. Senate followed suit. As a result, the PTC and alternative ITC, that also includes solar and geothermal energy, will now be extended for 2015 and 2016, and continue at 80 percent of present value in 2017, 60 percent in 2018, and 40 percent in 2019. As before, the rules will allow wind projects to qualify so long as they start construction before the end of the period.
“We’re going to keep this American wind power success story going,” said Tom Kiernan, CEO of the American Wind Energy Association (AWEA). “With predictable policies now in place, we will continue advancing wind turbine technology, driving down our costs and passing the savings on to American families and businesses in all corners of the country. We look forward to building a future with more affordable, reliable, clean wind energy.”
According to Kiernan, Industry leaders reacted to the news favorably, saying the multi-year extension supplies their companies with a level of predictability needed to keep U.S. factories open while adding new wind projects to the pipeline.
“On behalf of the nearly 2,000 Siemens wind energy employees in the U.S., I applaud Congress for its leadership in providing clear, long-term certainty for renewable energy growth in America,” said Jacob Andersen, CEO, Siemens Onshore Americas. “The PTC has encouraged tremendous investment in wind energy, helping to reduce the cost of wind power while simultaneously creating a new American industry. This extension will bolster the continued growth of domestic wind energy and the jobs this growing industry supports, allowing our factories to plan for the future as we continue to deliver innovation that drives down the cost of wind power.”
According to data from AWEA, the performance-based PTC has helped to more than quadruple wind power in the U.S. since 2008 – up from 16,702 megawatts (MW) installed at the start of 2008 to 69,470 MW by the third quarter of 2015. This is enough power to supply over 18 million American homes.
In addition, AWEA says the PTC has helped spur innovation in wind turbine technology, causing wind’s costs to fall 66 percent in just six years. The multi-year predictability will help continue that trend and break the repeated boom-bust cycles the U.S. wind energy industry has weathered through two decades of uncertain tax policies.