Stimulus package includes wind power tax credit extension
Iowa’s wind industry could get a jolt from the huge economic stimulus package being put together by House Democrats.
The legislation would extend for three years a tax credit that subsidizes the power from new wind farms. The tax credit applies for a project’s first 10 years. However, future projects may not be eligible for the subsidy unless the credit is renewed beyond this year.
Even that tax incentive hasn’t been enough to get some projects going during the recent economic downturn, because potential investors don’t owe enough in taxes to benefit from a credit, industry officials say.
So the stimulus package would create an alternative way to fund projects: Companies could instead get a grant directly from the government for 30 percent of their projects’ cost.
“Anything that assists with the financing of a wind farm project such as this would be very, very attractive to the industry,” said Harold Prior, president of the Iowa Wind Energy Association. Iowa is the nation’s third-largest producer of wind energy, behind Texas and California.
Rep. Bruce Braley, D-Ia., had proposed a seven-year extension of the wind tax credit but said Friday that a three-year renewal was good, considering the competing spending priorities in the bill. The industry has been struggling in recent years to get even one-year extensions of the credit because of its cost. The three-year renewal would cost taxpayers $13 billion.
Rep. Leonard Boswell, D-Ia., said the wind incentives and other renewable energy provisions would “work to make our country more energy-independent, along with saving money for both consumers and businesses.”
President-elect Barack Obama wants to use the stimulus package to double the production of renewable energy production within three years and increase energy conservation. “The need for this action has never been more urgent,” he said during a visit Friday to a plant in Ohio that makes bolts for wind turbines.
The energy measures also are seen as a first step in the incoming administration’s plan for reducing greenhouse gas emissions.
Missing from the stimulus package are policy changes to deal with another major barrier to the industry’s growth — a lack of long-distance transmission lines for carrying power from Iowa wind farms to urban centers out of state.
Those measures will have to wait for later legislation, said Greg Wetstone, senior director of governmental and public affairs for the American Wind Energy Association.
The stimulus bill was expected to offer little to the ethanol industry despite its ongoing financial struggles. However, the House measure would include an expansion of a tax credit for service stations that sell E85, a mixture of 85 percent ethanol and 15 percent gasoline. The limit on the credit would likely be raised from 30 percent to 50 percent of the cost of the equipment, up to a cap of $50,000, said Phillip Lampert, executive director of the National Ethanol Vehicle Coalition.
The House could vote on the stimulus bill as early as next week. The Senate version is still being developed.
By Philip Brasher
17 January 2009
Tags: Wind power, Wind energy
Some possibly related stories:
The copyright of this article is owned by the author or publisher indicated. Its availability here constitutes a "fair use" as provided for in section 107 of the U.S. Copyright Law as well as in similar "fair dealing" exceptions of the copyright laws of other nations, as part of National Wind Watch's effort to advance understanding of the environmental, social, scientific, and economic issues of large-scale wind power development. For more information, click here.
