WASHINGTON – U.S. Sen. Scott Brown and U.S. Rep. Niki Tsongas are hopeful that federal tax credits designed to boost wind energy production will be extended when Congress reconvenes in November – a decision that could affect thousands of wind energy jobs in the Bay State.
According to the Massachusetts Clean Energy Center, there are 8,250 wind industry jobs in the state. While it is unclear how many of these Massachusetts-based jobs would be at risk without the tax credits, wind energy advocates warn that about half of the nationwide jobs in the wind energy industry could be lost if the tax credits are not renewed.
The federal production tax credit – PTC – and investment tax credit – ITC – for wind energy are both set to expire at the end of the year unless Congress takes action to extend them. Both were created under the Energy Policy Act of 1992.
The PTC provides developers with a tax credit of $22 per megawatt hour of power generated, while the ITC generally accounts for 30 percent of the cost of the facility – thereby helping to make the cost of wind energy to the consumer more competitive with traditional fossil fuel-generated electricity.
The latter factor helps explain why the renewal of the credits have been an increasingly controversial – and partisan – issue in recent months, with conservatives arguing that the government should not be picking favorites in the economic marketplace.
In mid-September, 47 House Republicans signed a letter urging House Speaker John Boehner, R-Ohio, to let the PTC wind credit expire and not to bring up legislation to renew it. On the other side of the partisan divide, President Obama has pushed for the tax credit extension during campaign stump speeches as part of an effort to increase reliance on renewable forms of energy.
Although he initially voted in March against an amendment to extend the wind credits, Sen. Brown now supports continuing the program, according to a spokesman.
“Sen. Brown believes the wind PTC plays an important role in further developing wind energy resources, which are part of the all-of-the-above approach to energy production,” Brown’s press secretary, John Donnelly, said.
Tsongas, a member of the House Sustainable Energy and Environment Coalition, said the credits’ extension would contribute to job creation in the state.
“Now, 60 percent of the average turbine is manufactured here in the U.S.,” Tsongas said. “These companies hire skilled and unskilled workers, and provide good paying jobs in a rapidly growing sector of our economy.”
Job numbers in wind energy have recently risen in the Commonwealth: The current 8,250 jobs represent a 44 percent increase from a year ago, according to the Massachusetts Clean Energy Center ) a state agency created in 2008 to invest in early stage renewable energy projects.
Ellen Carey, a spokeswoman for the Washington-based American Wind Energy Association, reiterated this concern. The industry has been experiencing layoffs due to the uncertainty of the credits, which reduces the orders for wind turbines, she said.
“The tax credits are a success story at risk if [members of Congress] do not act soon to extend the credits,” she said. “It is an industry that employs 75,000 people and if they expired, then an estimated 37,000 jobs can be lost.
Overall, wind still accounts for a small percentage of the nation’s energy generation: It provided 2.9 percent of electricity in the United States in 2011, with that percentage rising to 3.8 percent for the first six months of 2012, according to the U.S. Energy Department. But Carey noted that wind energy now accounts for 35 percent of new power generation, second only to natural gas.
According to AWEA’s annual ranking reports, the cumulative U.S. wind power capacity installations were at 49,802 megawatts at the end of June, a three-fold increase from the total of 16,800 megawatts in 2007.
Wind developers in the Commonwealth can also utilize state grants to help get their projects off the ground. Since January 1, 2011, the Clean Energy Center has invested $5.7 million in the early stages of wind project development, said spokeswoman Catherine Williams.