U.S. electric utilities flock to wind energy as tax credit cuts rates

More U.S. electric utilities locked in contracts for wind power as a key federal tax policy held down rates for consumers, said the American Wind Energy Association (AWEA) in a statement Thursday.

The leading U.S. wind power industry group said 66 U.S. utilities bought or owned wind power by the start of this year, nearly half for large amounts over 100 megawatts, up from 42 a year ago.

It was largely driven by the Production Tax Credit for clean energy like wind power that had been extended by Congress in the “fiscal cliff” bill signed at the beginning of January.

The extension allows projects that start construction by the end of 2013 to claim 2.2 cents of tax credit for each kilowatt-hour of electricity generated. This major incentive for wind power industry has spurred a record amount of installation in 2012.

The AWEA’s quarterly market report counted 13,124 megawatts installed in 2012, overtaking the previous record set in 2009 by about 3,000 megawatts, which represented about 25 billion dollars in private investment. Wind power also became the number one source of new electric generating capacity in 2012 for the first time ever.

With more wind energy purchased, pollution was also contained. Currently installed wind turbines in the United States will avoid nearly 100 million metric tons this year of carbon dioxide emission, noted the association.

Besides utilities, new wind power purchasers in 2012 included at least 18 industrial buyers, 11 school districts, and eight towns or cities, showing a significant trend toward nontraditional power buyers.