Citing internal analysis, the American Wind Energy Association (AWEA) says phasing out the wind energy production tax cut (PTC) over six years would give the wind industry the time necessary to ramp-down the tax incentive.
According to internal AWEA analysis, the tax credit would start at 100% of the current $0.022/kWh for projects started in 2013, and would be phased down to 90% of that value for projects placed in service in 2014; 80% in 2015; 70% in 2016; and 60% in both 2017 and 2018, and would end after that.
Denise Bode, AWEA's CEO, says the six-year period allows wind energy to establish a stable base market in the U.S. that the industry can build on, with further market and technology innovation.
“We began this process in order to be a part of the solution on our nation's fiscal challenges, while creating needed stability for wind industry development, both of which are concerns for our industry," Bode says. “We completed the analysis, and this is what it identified as necessary for at least a minimally viable industry.”
Bode says the study included detailed economic analyses and high-level discussions with industry leaders, and culminated in approval by the AWEA's board of directors.
The letter, which was sent to Capitol Hill leaders, addresses separate parallel conversations that have been going on between the industry and Capitol Hill, about extending the PTC in the short term and the vision for the long-term future of the PTC, the association notes.