Congress today failed to extend the production tax credit for wind power, essentially knocking the wind out of the wind power industry.
The extension of the production tax credit for wind power was excluded from the payroll tax bill in Congress.
Failure to extend the production tax credit – which provides an income tax credit of 2.2 cents/kilowatt-hour for the production of electricity from wind turbines – is expected to result in layoffs of 37,000 people employed nationally by the industry and to stall or significantly push back wind generation projects around the country.
“This market for wind will grind to a halt without extension of the PTC,” Kevin Borgia, who heads up the Illinois Wind Energy Coalition, said earlier this week.
The move is expected to have major ramifications in states such as Illinois. The state has 13,892 megawatts of wind projects waiting to be connected to the electric grid, but many of those projects will be abandoned or significantly delayed without federal subsidies. The state is home to more than 150 companies that make their business along the wind supply chain. At least 67 of those companies make turbines or components for wind farms. Chicago is home to more than a dozen global or U.S. headquarters for major wind companies.
Because the payroll tax bill is expected to pass, the wind industry saw it as their best bet to usher through the extension. While there is still a possibility that the extension could come through as a stand-alone bill or tied to other legislation, Washington insiders say it is unlikely to happen before the election in November.
By then, the wind industry says it will be too late to avoid massive layoffs and project delays since wind projects slated for 2013 should be traveling their way down the supply chain now. Without the tax credit, many developers are putting off those projects.
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