The Wind Energy Production Tax Credit Act
Act VII of Energize America
To extend until 2015 the financial incentive currently provided to the wind power industry to enable this critical renewable energy source to achieve greater economies of scale, and to provide a reliable source of electricity that is not only as affordable as coal but is also both much cleaner and safer.
Good wind areas, which cover 6% of the contiguous U.S. land area, have the potential to supply more than one and a half times the current electricity consumption of the United States. Technology under development today will be capable of producing electricity economically from good wind sites in many regions of the country7. By 2007, the United States will have about 15,000 megawatts of installed wind-power capacity, compared to over 50,000 megawatts in Europe. Extending the existing production tax credit (PTC), scheduled to expire in 2007, will expand the installed base of wind power capacity to over 200,000 megawatts by 2020 by providing wind-farm entrepreneurs a stable and predictable market.
The Wind Energy Production Tax Credit Act will enable the American wind power industry to enjoy continued gthrough the extension of the PTC through 2015. The PTC is indexed to inflation and is currently 1.9 cents-per-kWh. TPTC will continue to apply to all electricity generated wwind turbines over the first ten years of a project’s operations, as it has proven its ability, when in force, to spur the development of the industry by allowing projects to be financed by the private sector over the long term.
Wind power creates new American jobs and exportable high-value products. In a country mourning the loss of manufacturing jobs and aching for clean, low-cost energy, wind power offers benefits on both fronts. The Wind Energy Production Tax Credit Act will create over 100,000 new jobs through 2020, primarily in rural communities. Based on industry averages, each 10 megawatts of wind generation capacity generates a total of 80 person-years of new employment, including 40 full-time jobs during the construction phase and the balance during the operational life of the wind farm. Most operational jobs need to be located close to the wind farms and will thus provide much needed economic growth and revenue to many isolated rural areas. Farmers will also see a boost to their incomes via land leases for wind turbines that only slightly reduces their available farming land.
Wind-generated electricity will provide a reliable source of clean and affordable energy for many Americans by capping the price paid by the utilities purchasing their power, and eliminating price risk on fuel supply for the corresponding kWh. Wind power also eliminates millions of tons of carbon emissions that would otherwise be generated by burning coal. Furthermore, exporting high-value wind power systems will reduce the trade deficit and help to rebuild America’s manufacturing might.
The Wind Energy Production Tax Credit Act is estimated to cost $4 billion per year on average.