Wind energy PTC set to expire today

Key federal incentives for wind power are set to expire today as fiscal cliff negotiations stretch into the final hours of 2012.

The production tax credit provides a 2.2-cent tax break for every kilowatt-hour of electricity produced from large-scale wind farms.

The wind energy industry supports manufacturing and construction jobs in Pennsylvania, according to the American Wind Energy Association. At least two facilities currently manufacture components for the industry in York County.

Over the last couple of decades, the tax credit has allowed the industry to grow from about 9,000 megawatts of capacity installed in the country at the end of 2005 to over 50,000 megawatts installed by the third quarter of 2012, said Susan Stewart, director of the Penn State Wind Application Center, in an email.

“If the PTC (production tax credit) is not extended, many domestic manufacturing facilities will likely shut down and the level of wind energy growth in the U.S. will certainly slow down, but it will not disappear entirely,” Stewart said.

As the expiration date neared, the construction of new wind farms appeared to be put on hold across the country, including Pennsylvania, said Kerry Campbell, environmental group manager at the Pennsylvania DEP, in an email.

Without the domestic development, jobs in the industry are on the line, Campbell said.

Gamesa, a wind turbine manufacturer based in Spain, opened its American headquarters in Bucks County in 2007. This year, the company announced layoffs due to the pending expiration of the tax credit, Campbell said.

Even if the wind production tax credit makes the cut in the fiscal deal, the impacts of not extending it sooner are already being felt extensively across the industry, Stewart said.

“Thousands have already lost their jobs and there will be very little added wind capacity in 2013,” Stewart said.

While some planned installation projects might be cost competitive without the tax credit, the uncertainty of the future of this policy has brought the industry to a near halt for the next year in the U.S., Stewart said.

The American Wind Energy Association is proposing an extension with a gradual phase out through 2018.

A similar personal tax credit for residential and small business applications expires at the end of 2016, said Stewart, and will not be impacted by the current fiscal negotiations.