Fiscal Cliff a Threat to Wind Industry
Talks about the fiscal cliff are going on and there are proposals to extend the tax credit that has helped improve the boom of the wind industry in the United States. A bipartisan group of lawmakers wants to attach a one year extension of the credit that is supposed to expire by the end of December.
Analysts said that without the credit, the wind industry would contract. It will not be as competitive with prices for natural gas. Government data showed that the 20 year old production tax credit that cuts the cost of a wind project by a third has expired three times in the past. Wind production dropped the year after deadline.
The concerns about the wind credit have caused thousands of workers in the wind industry to lose their jobs this year. Wind turbine manufacturers Katana Summit and Siemens Wind Power have recently cut jobs.
The wind industry could get tax breaks just like the other energy sectors, including the $4 billion annual subsidies given to the oil and gas industries since the 1960s. But there are those who oppose the wind tax credit that is estimated to cost taxpayers $1.3 billion in 2012. They said that the wind industry should be mature enough to compete without the subsidies.
Most observers expect congress to give a one year extension for the wind industry. They said that wind industry is popular in rural areas where there are many Republicans. Some of the advocates for the wind credit include GOP Senator Chuck Grassley and Representative Steve King. They both came from Iowa, which received around 20 percent of its power from wind.
If the tax credit is extended, it would contain more helpful language. Last August, the Senate Finance Committee approved the extension that requires wind projects to be started by the end of 2013 to qualify for the credit.