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

Are Fitch Ratings' Claims About Wind Farm Underperformance Unfounded?

A recent report from Fitch Ratings suggests that wind farms underperform due to an overestimation of wind resources, but AWS Truepower says the analysis misses the mark.


SunEdison Buying First Wind In $2.4 Billion Deal

Global solar company SunEdison and its yeildco have announced an agreement to buy the Boston-based developer, a major player in the U.S. wind industry.


U.S., China Reach Ambitious Climate Change Accord

The agreement between the global superpowers leans heavily on the deployment of renewable energy, such as wind and solar.


What The Midterm Elections Mean For The U.S. Wind Industry

Both chambers of Congress are now under Republican control for the first time since 2006. How will wind energy fare?


GE Blade Crashes At Mehoopany Wind Farm In Pennsylvania

The turbine manufacturer says the Nov. 2 incident is "isolated and unrelated" when compared to earlier blade issues.

Hybrid Energy Innovations 2015
Renewable NRG_id1934
BG 2015DblBox_id2032