The continued expiration of the U.S. production tax credits for energy projects has caused renewable energy developers to focus on international projects.
The production tax credits for renewable energy projects expired at the end of 2013 and haven’t yet been renewed, as has happened when the credits have expired before. Jim Adams, president of Natural Power’s North American operations supports the continuation of the tax credits, but what he wants more is stability.
“If it’s going to go away, let it go so we can figure out what’s next,” Adams said. “It is grossly unfair that the renewable energy industry, especially wind, has been subject to these uncertainties.”
The delay is causing more renewable energy developers to focus on international projects, said Adams, who heads Natural Power’s North American operations based in Saratoga Springs, New York.
Natural Power, a renewable energy consulting company based in Scotland, opened its U.S. headquarters in Saratoga Springs five years ago. The company employs about 350 people globally and 10 people in the U.S.
About a third of the projects that the U.S. branch is working on are located outside of the United States, in South America, the Carribean and Mexico. That percentage has increased in recent years, as clients look for more certainty, Adams said.
Another Albany area renewable energy consulting group also has focused heavily on expanding its international reach. AWS Truepower in Albany, New York, has built a presence in India, Poland, Barcelona and Brazil. A branch in Mexico could follow, said Bruce Bailey, who founded the company in 1983.
The expiration of the tax credits has played a role in the company’s growing international focus, as clients look to be less dependent on the U.S. energy market, Bailey said.
Both executives say they favor an extension of the tax credits, with a plan to phase out the incentive.
A multi-year extension with a clearly identified phase out period would allow developers to plan a business model and know which of their projects will work in the incentive timeline, Adams said.
A bill to renew the tax credits was introduced in Congress in the spring, but has not moved forward. Adams said he believes the industry will have to wait until after the November elections.
Nearly two-thirds of the projects the Natural Power is involved with are driven by the production tax credit. Some projects that began construction last year qualified for the credit before it expired.
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