Extending a tax credit for new wind farms would cost billions of dollars over the next decade, according to congressional analysis obtained by The Hill.
The tax credit for building wind facilities, which has been a top priority of the White House, is set to expire at the end of 2013.
Extending it for one year would cost $6.1 billion over the next 10 years, according to analysis from the Joint Committee on Taxation. Extending the credit for five years would cost $18.5 billion.
The tax credit is the subject of a House Oversight and Government Reform subcommittee hearing Wednesday.
Congress extended the credit for one year in January, with a significant push from the White House, as part of a deal to avert the “fiscal cliff.”
That renewal amended the credit to apply toward facilities on which construction begins by the end of the year, rather than those that start operating by that date.
Critics of the program have worried that the tweak will greatly expand the program, even though the wind industry needs no fostering.
The wind energy sector has grown about 30 percent each year for the past five years, according to the American Wind Energy Association (AWEA).
Supporters say that the credit is necessary to keep energy costs low.
“Extension of the Production Tax Credit will let our businesses plan and invest in further improvements in wind technology, and keep bringing consumer costs down,” AWEA Vice President of Public Affairs Peter Kelley said in an email to The Hill.
“In the absence of federal energy policy, the tax code is the de facto energy policy of our country, and it’s working to drive the adoption of wind and other renewables. AWEA supports an extension for the longest practical term to give the industry the predictability it needs.”
But opponents allege that the industry should be able to thrive on its own.
“Congress should end – not phase down, not extend – the wind production tax credit this year,” Christine Harbin Hanson, a federal policy analyst for Americans for Prosperity wrote on The Hill last week. “Americans deserve energy solutions that can make it on their own in the marketplace – not ones that need to be propped up by government indefinitely. Washington’s longtime policy of giving preferential tax treatment to special interests simply isn’t working.”
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