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Wind Energy Tax Credit Expiration Would Yield Job Losses, Big Cuts in Capacity

Report from industry group AWEA suggests wind power needs the Production Tax Credit to thrive

2 min read
Wind Energy Tax Credit Expiration Would Yield Job Losses, Big Cuts in Capacity

The Production Tax Credit allows wind energy producers to take a 30 percent tax cut on the investment. It is currently set to expire in 2012, and the industry is pushing hard to extend it. A new report commissioned by the American Wind Energy Association -- and conducted by consulting firm Navigant -- suggests large deficits in wind energy-related jobs, installed capacity, and related carbon dioxide emissions if the PTC is allowed to expire.

The report, which compared scenarios with an extension through 2016 and without, found that expiration of the credit would cut wind-related jobs from 78,000 in 2012 all the way to 41,000 in 2013. The extension scenario, meanwhile, yielded a slight drop in 2013 on the way up to 95,000 jobs in 2016.

Denise Bode, CEO of AWEA, said in a press release: "American manufacturing jobs are coming back, with tens of thousands of new jobs from wind power. But these jobs could vanish if Congress allows the Production Tax Credit to expire, in effect enacting a targeted tax increase, and sending our jobs to foreign countries. Congress must act now to keep this American manufacturing success story going."

Aside from the jobs, installed wind capacity would obviously suffer as well. After an estimated 8 gigawatts are installed in 2012, that would drop to below 2 GW in 2013. The total installed between 2011 and 2016 would be 28.8 GW, compared with 49 GW with the extension of the PTC. The extension would as a result help reduce CO2 emissions by 170 million tons over the expiration scenario.

There is movement in Congress to try and extend the credit. The eloquently named American Renewable Energy Production Tax Credit Extension Act of 2011 is currently in the House ways and means committee, and has 39 co-sponsors, including 11 Republicans. The PTC has been around since 1992, and it seems clear that when up against more entrenched energy sources, wind power still needs the help to survive and thrive.

(Image via NREL)

The Conversation (0)
This photograph shows a car with the words “We Drive Solar” on the door, connected to a charging station. A windmill can be seen in the background.

The Dutch city of Utrecht is embracing vehicle-to-grid technology, an example of which is shown here—an EV connected to a bidirectional charger. The historic Rijn en Zon windmill provides a fitting background for this scene.

We Drive Solar

Hundreds of charging stations for electric vehicles dot Utrecht’s urban landscape in the Netherlands like little electric mushrooms. Unlike those you may have grown accustomed to seeing, many of these stations don’t just charge electric cars—they can also send power from vehicle batteries to the local utility grid for use by homes and businesses.

Debates over the feasibility and value of such vehicle-to-grid technology go back decades. Those arguments are not yet settled. But big automakers like Volkswagen, Nissan, and Hyundai have moved to produce the kinds of cars that can use such bidirectional chargers—alongside similar vehicle-to-home technology, whereby your car can power your house, say, during a blackout, as promoted by Ford with its new F-150 Lightning. Given the rapid uptake of electric vehicles, many people are thinking hard about how to make the best use of all that rolling battery power.

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