Although some damage has already been done, the wind energy industry can breathe a sigh of relief: On Tuesday evening, an extension of the wind energy production tax credit (PTC) cleared Congress as the U.S. House of Representatives passed H.R.8, legislation that would avert the so-called fiscal cliff.
Under the measure, which is identical to the version passed by the Senate Finance Committee in a separate bill in August, wind energy projects would have to begin construction by Jan. 1, 2014, in order to receive the $0.022/kWh incentive. Notably, the amending of the "in-service" date to a "begin construction" date allows for more lead time for developers than would a one-year extension alone.
The bill also includes an extension of the investment tax credit - which could be the key to jump-starting the U.S. offshore wind energy industry - for projects that begin construction before Jan. 1, 2014.
The fiscal-cliff legislation, which passed the Senate on Monday, is a relief for the wind energy industry, which has suffered from the market uncertainty resulting from the looming PTC extension.
The American Wind Energy Association (AWEA), which has led the industry’s PTC-extension efforts over the past year, commended Congress on the deal.
"On behalf of all the people working in wind energy manufacturing facilities, their families and all the communities that benefit, we thank President Obama and all the members of the House and Senate who had the foresight to extend this successful policy, so wind projects can continue to be developed in 2013 and 2014," said Denise Bode, who has served as CEO of AWEA for the past four years and currently announced her resignation.
Sen. Mark Udall, D-Colo., who has been one of the most ardent wind energy PTC supporters in Congress, also praised the deal and said he would continue to fight for the wind industry.
"Extending the wind production tax credit is a long-overdue dose of certainty for manufacturers who employ more than 5,000 Coloradans and 60,000 workers across America," Udall said in a statement. "Although this deal is not perfect, I am glad my colleagues have acknowledged what I have spoken about regularly on the Senate floor: Wind energy creates jobs and benefits every American. I look forward to continuing to lead the fight for our wind industry and an all-of-the-above energy policy in 2013."
Meanwhile, the reactions are pouring in from manufacturers, many of which are encouraged by the good news but are less optimistic about the year's outlook.
"Even though the late timing of the extension will result in a significant reduction in 2013 installations relative to previous years due to the time it takes from when an order is placed to project completion, the U.S. market will nonetheless be stronger as a result of the PTC extension," wind turbine manufacturer Vestas said in a statement. "The one-year extension, which includes language to allow projects under construction by the end of 2013 to be eligible to claim the PTC after 2013, is critical to sustaining the U.S. market going forward. Vestas will work closely with its customers to meet the requirements."
President Barack Obama is expected to sign the legislation into law shortly.