But after a key incentive, the 1603 federal Treasury grant program, was extended for a year in December, the wind industry began to perk up. As 2011 begins, roughly 5,600 megawatts of wind power capacity is under construction, the trade group said.
Some new wind farm projects being hammered out include electricity prices set at 5 cents or 6 cents per kilowatt hour, which would make wind power competitive with natural gas, the American Wind Energy Association said. Energy project developers receive a 30 percent tax credit for investing in wind farms, but the existing credit was set to expire at the end of 2010. The uncertainty over whether that investment tax credit would be renewed caused "a dampening effect on investment all the way around," said Peter Kelley, the vice president of public affairs at AWEA.
The lame duck Congress in mid-December passed an extension to the tax credit until the end of 2011. With that in place, AWEA says that utilities are locking in today’s rates to purchase wind power, with 5,600 megawatts now under construction.
With the direction on national wind policy unclear, state-level policies, such as utility mandates for renewable energy, are becoming more important. Texas is by far the biggest wind power state, with 10,085 megawatts of capacity installed compared to 3,675 megawatts for Iowa and 3,177 megawatts in California.
Total U.S. wind capacity now stands at 40,180 MW, an increase in capacity of 15% over the start of 2010, AWEA reported today. For the first time, U.S. capacity fell second to China’s; China now has 41,800 MW in operation, an increase of 62% in capacity over a year ago, according to a Jan. 13 report from the Chinese Renewable Energy Industries Association.
With uncertainty over national policies still holding back the U.S. industry, state targets for renewable energy continue to drive wind installations in many areas of the country. "We’ll continue to work for a strong federal energy policy that drives the deployment of renewable energy technologies in the 112th Congress," Bode said, "but we’ll also be defending and improving on state renewable targets, as well as promoting other sources of demand – such as more distributed and community wind projects, and corporate purchasing under the new WindMade trustmark."