Key federal incentives for wind power were extended as part of
the federal budget deal passed by Congress on Jan. 1.
The production tax credit provides a 2.2-cent tax break for every kilowatt-hour of electricity produced from large-scale wind farms. The program received a one-year extension, the Associated Press reported.
The credit will cost $12.2 billion and will save as many as 37,000 jobs, the American Wind Energy Association reported.
The wind energy industry supports manufacturing and construction jobs in Pennsylvania, the association said. At least two facilities currently manufacture components for the industry in York County.
Over the last couple of decades, the tax credit has allowed the industry to grow from about 9,000 megawatts of capacity installed in the country at the end of 2005 to over 50,000 megawatts installed by the third quarter of 2012, said Susan Stewart, director of the Penn State Wind Application Center, in an email.
If the production tax credit had not been extended, many domestic manufacturing facilities would have shut down, Stewart said.
The extension brings one major change, however. Traditionally, the credits were only available once a wind farm was up and running. Now, any wind project that breaks ground in 2013 will have access to the credits when production begins, which should ensure some development this year, the Associated Press reported.
As the expiration date neared in 2012, the construction of new wind farms appeared to be put on hold across the country, including Pennsylvania, said Kerry Campbell, environmental group manager at the Pennsylvania DEP, in an email.
Without the domestic development, jobs in the industry were on the line, Campbell said.
Gamesa, a wind turbine manufacturer based in Spain, opened its American headquarters in Bucks County in 2007. This year, the company announced layoffs due to the pending expiration of the tax credit, Campbell said.
The company is still planning to lay off 92 workers, according to wire reports.
Even though the wind production tax credit made the cut in the fiscal deal, the impacts of not extending it sooner are already being felt extensively across the industry, Stewart said.
"Thousands have already lost their jobs and there will be very little added wind capacity in 2013," Stewart said.
The American Wind Energy Association is proposing an extension with a gradual phase out through 2018.
A similar personal tax credit for residential and small business applications expires at the end of 2016, said Stewart, and is not impacted by the recent budget deal.
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