in News Departments > Policy Watch
print the content item

On Feb. 26, House Committee on Ways and Means Chairman Dave Camp, R-Mich., released a scathing tax reform proposal that seeks to dramatically reduce the amount of the wind energy production tax credit (PTC) before eliminating the incentive altogether.

Per Camp's plan, the Tax Reform Act of 2014 would retroactively reduce the amount of the PTC to $0.015/kWh - from the current $0.023/kWh - for wind projects currently receiving the credit until the end of the incentive’s 10-year period, thereby eliminating future inflation-related adjustments. Equally notable, the Camp proposal would fail to extend the recently expired PTC.

In its justification for reducing the amount of the credit, the committee asserts that the wind industry explained it could survive with a scaled-down PTC - even one that would be worth 60% of the current credit. With the input, the committee theorized, “The credit provides a windfall that does not serve the intended policy.”

While the act uses rhetoric similar to that of the tax reform bill rolled out by the Senate Finance Committee in December, Camp’s proposal to fix the “broken tax code” takes a dim view on the PTC and questions if the industry still requires the tax incentive in the future. For example, after 2024, according to the Camp proposal, the wind energy PTC would be eliminated.

Despite the threat, Jeff Davis, partner at law firm Mayer Brown, explains “the legislation is highly unlikely to be enacted in its current form.”

Notably, Davis says, Camp’s proposal is merely a “discussion draft” - mitigating much of the bad news. Still, he says, there are areas for the wind industry to be concerned.

For example, a provision contained in Camp’s draft proposal would require that wind farm construction be continuous. Such a requirement would override the current Internal Revenue Service (IRS) safe harbor, which requires construction to be continuous for wind projects started by Dec. 31, 2013, and a project to be placed in service by Dec. 31, 2015.

While Davis reiterates that the proposal equates to one of discussion, the draft language suggests that Camp views the IRS guidance as “too liberal.” If that is the case, such a viewpoint “could have a chilling effect on the wind industry and participants as to what it takes to satisfy the ‘commence construction’ requirements.”



Trachte Inc._id1770
Latest Top Stories

Utility-Scale Wind And Solar Keep Getting Cheaper

A new study measures the levelized cost of energy from various technologies and suggests that the costs of utility-scale wind and solar power are catching up with those of traditional sources, even without subsidies.


The Song Remains The Same: Ontario Seeks More Science Before Lifting Offshore Ban

The Ontario government says the nearly four-year-old offshore wind moratorium will remain in place until the province fully understands the technology’s impact on the environment.


Why States Should Adopt A Renewable Portfolio Standard

A new study analyzes the potential benefits of state renewable energy mandates, as well as recommends what such policies should include.


Sen. Reid Vows To Bring Wind PTC To A Vote By Year's End

Nevada's senior senator provides some encouragement to wind industry advocates during his annual Clean Energy Summit.


Steadily, Wind Turbine OEMs Resume R&D Investment

An increased commitment to research and development will likely lead to wind energy innovation - not to mention a likely increase in patent-protected technology.

Canwea_id1984
Renewable NRG_id1934
Future Energy_id2008
UnitedEquip_id1995