2013-01-10

Co.Exist

U.S. Wind Industry Staggers To Its Feet After Its Tax Break Was Saved At The Last Minute

The fiscal cliff deal restored an important tax break (though one much smaller than, say, the oil and gas industry). But will the late timing of the deal mean that the damage is already done?

2012 was a tough year for the global wind industry. Spain’s budget crisis shrank the once-thriving market; China’s breakneck expansion, with enough turbines to be the biggest wind generator in the world, came up against inadequacies in the electric grid. Here in the U.S., uncertainty about the future of the wind production tax credit, which was set to expire at the end of the year, led to layoffs of thousands of workers and the cancellation of many planned projects.

This week, the U.S. wind industry thanked their friends in the Senate, Max Baucus and Chuck Grassley, for extending the tax credit, 2.2 cents per KwH, as part of the fiscal cliff deal on New Year’s. The deal also extended tax credits on biodiesel and biomass. Vestas, the world’s largest wind company, said in a statement, "The short-term PTC [production tax credit] extension is critical to ensure projects move forward and orders are placed that will support U.S. manufacturing and the domestic supply chain."

In the first nine days of the year they’ve already announced a three-year extension to a service and maintenance contract in Iowa. But Vestas also said the late timing of the extension would cause a dip in new projects this year. And the fact that the extension is good only for new projects begun in this calendar year, 2013, will hurt long-term planning. Vestas had no word as to whether they’d go through with a previously projected 3,000 layoffs in the U.S.this year.

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