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IRS doubles the time wind industry can receive subsidies
Credit: By John Siciliano | Washington Examiner | 5/6/16 | www.washingtonexaminer.com ~~
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Translate: FROM English | TO English
The Obama administration on Friday doubled the amount of time wind energy companies have to take advantage of a key tax subsidy, which critics blasted as undermining a landmark deal last year to phase out the renewable energy credits.
The Internal Revenue Service extended the number of years wind projects can take advantage of the maximum level of subsidy, from two to four years, under a “commence construction” clause in the tax code.
The clause makes a project eligible for the tax credits, even if it is phased out, if the developer demonstrates some effort to begin construction, rather than have a project in service within the cutoff period.
That means wind projects will have added security in receiving the production tax credit at its highest level before the phase down begins under last year’s omnibus spending bill deal. The deal extended tax credits for wind and solar for five years on the basis that they would be phased downward over that time.
Conservative groups came out immediately in opposition to the change, with one group calling it nothing short of an act of “theft” against the American taxpayer.
“The IRS is far more concerned about providing special interest handouts through the wind PTC than protecting the American families who actually pay taxes,” said Institute for Energy Research President Thomas Pyle.” This is just another example of the Obama administration circumventing the will of Congress, which began the process of phasing out this wasteful subsidy in December of last year.
“It now falls to Congress to clean up the taxpayer-funded mess this administration has made,” Pyle said.
The wind credit, which equates to roughly 2.3 cents per kilowatt hour of electricity produced, begins phasing down in 2017, by 20 percent, according to the Energy Department. Companies that begin construction by Dec. 31, 2016, can capture the maximum amount due while they finish up their projects.
The cost of the wind subsidy program is estimated at just under $15 billion. But with the time extensions, that cost could rise.
Although the credit is phased out for wind projects over time, it expires at the end of the year for other renewable energy projects. Other energy sources will get the credit if they have begun construction of their project before that time, according to the Energy Department.
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