Northwest wind developers are once again grappling with uncertainty as the federal tax credit for renewable energy production is set to expire Dec. 31.
It’s a familiar challenge for the industry. The credit, which pays 2.3 cents per kilowatt-hour of electricity generated by wind, nearly expired a year ago until it was extended by Congress as part of a deal to avoid the dreaded “fiscal cliff.”
Advocacy groups are now lobbying to keep the incentives intact, but opponents argue federal wind subsidies are inequitable and unfairly burden taxpayers across the country.
Amy Baird, spokeswoman for the Renewable Northwest Project in Portland, said there is plenty of potential for wind farms in the region if they can have stable, long-term federal policy. Oregon has already invested more than $9 billion in renewable energy over the last decade, according to the organization.
Allowing the production tax credit to expire only discourages that positive growth, Baird said.
“Having stable, long-term policy creates a safe business environment,” she said. “We hope (the tax credit) continues to be part of our policy in the state.”
In years past, only finished projects could qualify for the credit. When lawmakers extended the program in 2012, they allowed projects to qualify so long as developers had either started construction or invested 5 percent of its cost before the end of the year.
A database provided by the Renewable Northwest Project shows no projects currently under construction in Oregon, though 11 have been approved and nine more are in the permitting process.
One project being developed in Morrow and Umatilla counties is a 500-megawatt facility proposed by Wheatridge Wind Energy and Swaggart Energy Transmission in Ione.
It could start generating electricity by the end of 2016 if approved by the Oregon Energy Facility Siting Council.
That’s too late to qualify for a tax credit as it stands now, said Sam Enfield, a Seattle-based manager working with the group.
Enfield began his career in wind development in 1992 — the same year the production tax credit was first created. He said there’s still recognition of its importance not only for developers, but also consumers.
“The production tax credit basically flows through to the price,” Enfield said. “I believe the technology has improved so much, and costs have come down so far, wind energy is really becoming mainstream. We’ve seen enough validation over the years to keep making this investment.”