All Eyes on Wind Tax Credit as Fiscal Cliff Approaches
Every day we hear about the fiscal cliff and how it, or a deal to avoid it, might affect the national economy or individual pocket books. One of the main topics of discussion is the Republican Party’s proposal to increase revenue by eliminating some tax credits and incentives. Most of the talk focuses on how tax credits might affect charitable giving or the tax returns of individual citizens, but people in the wind turbine industry are beginning to make noise about the possibility of losing their Wind Production Tax Credit.
The tax credit is scheduled to expire at the end of December, meaning it would be up for discussion even without the fiscal cliff debate. The current national focus on tax credits only serves to increase the tension around the issue. Some experts have voiced the opinion that uncertainty around the tax credit’s renewal has already damaged the industry, causing companies to take a more conservative approach in hiring and planning future turbine installations.
Wind energy has done very well over the last five years, growing at a faster rate than every other form of energy generation except for natural gas. Wind accounts for 35 percent of the generating capacity added in this country during that period, which is more than nuclear and coal power combined. The United States now boasts 20 percent of the world’s total wind power.
Michael Bernier, who analyzes renewable energy tax credits for New York accounting firm Ernst & Young, told USA Today everything could change very quickly if the tax credit isn’t renewed. He explained the current year was looking good, projecting new wind power installations would top 13,000 megawatts of power this year, breaking the previous record of 10,000 megawatts installed in 2009. He said that trend would reverse very quickly if the tax credit didn’t exist in 2013.
“Half the jobs in the industry could be lost within a year,” he predicted.
Many observers have made comments about how the national debate around the fiscal cliff appears to be a continuation of the presidential campaign and this issue is no different. Even former President Bill Clinton is getting in on the act, as he will deliver a speech celebrating the growth of wind power in the Midwest when he appears at a speaking engagement Wednesday, Dec. 12, in Chicago. Clinton is a natural spokesman for the cause as he extended tax credits for wind and energy during his presidency and increased energy-efficiency standards for home appliances and federal buildings.