Wind Tax Credits Hanging in the Wind

Cleantech Trends

The campaign trail has been heated over energy tax credits and subsidies. Ethanol, oil, gas, coal, and renewable energies are all being touted as job creators.


In Iowa, where 7,000 people are employed in the Wind industry, the candidates advocated for their positions for and against Wind subsidies. At stake is the federal renewable energy production tax credit (PTC) which provides an income tax credit of 2.2 cents per kilowatt hour for the production of electricity by Wind. It is set to expire on December 31, 2012 unless renewed.


President Obama has called on congress to extend the production tax credit; Romney has opposed the PTC for the Wind industry calling for free market forces to determine the energy winners.


Production tax credits promote the Wind industry at a national level. Tax incentives were first enacted in 1992 as a mechanism to bridge gap between establish and new energy technologies. The debate over the extension of Wind energy tax credits has been on-going since then. Incentives had been allowed to expire every couple years until the last five when there was a continuous PTC in place, and the industry was able to scale up by attracting $15b in private investment. Previously, the discontinuity in the Wind PTC was a disincentive to investment, inhibiting industry growth.


Wind represented 2.9% of all electricity generated in 2011. 2012 will be larger as installations have increased. Over the last 5 years under the PTC, 500 manufacturing plants in 43 states have scaled up, and Wind added 35% of all new generating capacity over the last four years (second only to natural gas, and more than nuclear and coal combined). The U.S. now has the second most installed capacity, behind only China. And the U.S. is the largest Wind producer in the world.


However, the uncertainty and expiration of the PTC is causing companies to scale back or avoid investment. Layoffs in U.S. Wind power manufacturing plants were announced this month at four major manufacturers (Tulsa, Okla., DMI Industries; West Fargo, N.D., DMI Industries; Little Rock, Ark., LM Wind Power; and Dallas, Tex., Trinity Structural Towers).


The tax incentive debate has largely been focused on jobs so let’s look at those numbers. According to the Bureau of Labor Statistics (July 2012):


  Number of U.S. Jobs Percentage of U.S. Jobs
Wind 75,000 0.05%
Oil, Gas, & Coal Mining 790,000 0.51%
Renewable Energy Including Wind 3,000,000 1.94%
All Jobs 155,000,000 100%


While these aren’t a lot of jobs in the big scheme of things, they are jobs nonetheless. And the Wind industry in particular has increased U.S. domestic high tech manufacturing jobs more than many industries. So what do you think about PTCs for Wind, renewables, oil & gas? join the debate!





Related reading/listening:


Preliminary Analysis of the Jobs and Economic Impacts of Renewable Energy Projects Supported by the §1603 Treasury Grant Program

The Politics And Potential Of Wind Power – The Diane Rehm Show

Obama, Romney talk energy in battleground states

Wind Energy Tax Credit: More Hot Air or Key Job Creator?


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Redfish Technology, Inc. is a renewable energy recruitment firm. The company specializes in Green Technology industries such as Solar, Energy Efficiency, ESCO, Smart Grid, Energy Storage, Battery, Electric and Hybrid Vehicles, Wind, Fuel Cells, and other Renewable Energy sectors. You will find articles monthly on the blog Catch of the Day focusing on issues and trends in the CleanTech sectors.

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