Thursday, April 24, 2014
The one-year extension of a U.S. tax credit for wind power, approved by Congress this week, will save as many as 37,000 jobs. But the wind industry is expected to stall this year, so the impact may not be fully felt until 2014, the American Wind Energy Association says.
An extension of the production tax credit was part of Tuesday's bill to avert the so-called fiscal cliff. The extension will cover all wind projects that start construction in 2013.
The wind industry lobbied all through 2012 for an extension of the credit. The U.S. installed an estimated 11,800 megawatts of turbines in 2012, but because of uncertainty over the production tax credit, turbines producing only 4,800 megawatts are planned for this year, according to Bloomberg New Energy Finance. With the extension, development will probably pick up in the second half of the year and may not drive significant growth until next year.
"Though too late for this year, it will allow the U.S. market to see some recovery in 2014," Justin Wu, the Hong Kong-based head of wind analysis at New Energy Finance, said by email.
Energy developers were racing to complete work by Dec. 31 to qualify for a tax credit of 2.2 cents per kilowatt-hour for power from wind farms that were complete by the deadline. Manufacturers and installers of wind turbines had sought the revised language in Tuesday's bill to allow for the 18 months to 24 months needed to develop new wind farms, according to the Washington-based trade group.
"The down-to-the-wire nature of this extension meant that many developers, rushing to finish their projects before the 2012 year-end deadline, probably had to work through the holidays," Wu said.
The tax credit helped make wind the largest source of new capacity in the U.S. last year, according to New Energy Finance.
Wind energy has the potential to supply as much as 20 percent of America's electricity by 2030, according to projections from the U.S. Energy Department.