Neither the Production Tax Credit (PTC), which the US wind industry needs to avoid a collapse in 2013, nor the Treasury grant programme – key for the nation’s solar industry – would be extended under a tenuous year-end legislative package.
Despite an all-out lobbying push, the American Wind Energy Association (AWEA) could not convince lawmakers to include the PTC in year-end legislation to extend tax provisions, such as a payroll tax cut and unemployment benefits, that expire on 31 December without Congressional action.
The top priority of the US wind industry is an extension of the PTC, which is worth $0.022/kWh for a project’s first 10 years in operation.
It is only available to projects that begin operation by 31 December 2012. Uncertainty about its continuation is already having a deleterious impact on the industry as developers scale-back project development for 2013 and beyond, slowing the flow of orders into wind equipment manufacturers.
The US solar industry mounted a campaign for a second one-year extension of the Treasury grant, which expires 31 December, and pays up to 30% of eligible renewable energy project costs. Last year, Congress extended the grant, given in lieu of tax credits, just as it was about to expire.
“We are disappointed that an extension of wind energy’s key federal tax incentive was not included in this bill,” AWEA chief executive Denise Bode said in a statement over the weekend. “The clock is ticking, business decisions are being made and some damage is certain.”
The industry had identified the year-end legislation as one of at least three possible opportunities to advance a PTC extension before the end of 2012.
Bode and the US wind industry now look ahead to Congressional action on tax extenders after the holidays.
“When Congress addresses extenders next year, we are very confident that continuing the wind manufacturing success story will be a prominent objective,” Bode says. “Tens of thousands of wind energy manufacturing jobs can still be saved if Congress addresses extenders early in 2012.”
The industry hopes that it can continue to build momentum behind a PTC extension into the new year.
The circumstances under which tax extenders legislation would be addressed in 2012 will be shaped by whether the House and Senate can come to an agreement now.
That looked increasingly unlikely Monday as Republicans in the House refused to support a bill passed by the Senate on Saturday to extend the payroll tax cut for two months, and the Senate appeared unwilling to return to work to take on the full-year extension proposed in the House.