Senate committee votes 23-3 to extend federal tax credits
AWEA applauds strong bipartisan support for American wind power, renewable energy tax incentives
industry news release
Washington, D.C., July 21, 2015 – The American wind energy industry today praised members of the U.S. Senate Finance Committee for voting overwhelmingly to extend over 50 tax policies through 2016, including the renewable energy Production Tax Credit (PTC) and Investment Tax Credit (ITC) that incentivize the building of more U.S. wind farms.
The committee on a final vote of 23-3 reported out a “tax extenders” bill preserving language that allows wind farms to qualify so long as they start construction while the tax credits are in place.
Those credits expired at the start of this year, again throwing the future of American wind energy into doubt once projects currently under construction are completed.
“This is a big step in the right direction,” said Tom Kiernan, CEO of the American Wind Energy Association (AWEA). “We applaud the committee’s vote because it recognizes that the vast majority of American voters support these policies and want them continued. We urge the full Senate and the House of Representatives to follow the Senate Finance Committee’s bipartisan lead, and quickly pass this tax extenders package, which will continue to grow American jobs and heavy manufacturing, and support rural economic growth.”
The federal PTC and ITC are predominant drivers of new wind farm development, and have helped lower the cost of American wind power by more than half over the last five years, while making the U.S. number one in the world in wind energy production.
Senate Finance Committee Chairman Orrin Hatch (R-UT) in today’s hearing regularly acknowledged the strong sense of bipartisan support for renewing the tax extenders package. Sens. Pat Toomey (R-PA), Dan Coats (R-IN), and Rob Portman (R-OH) withdrew amendments opposing the PTC, while Sen. Michael Bennett (D-CO) made the senators aware of the tremendous amounts of economic benefits and jobs wind power has created in Colorado.
In 2013, after the renewable energy tax credits were allowed to expire even briefly, installations of new wind farms fell 92 percent, causing a loss of 30,000 jobs across the industry that year. After Congress renewed the PTC, the U.S. wind energy industry added 23,000 jobs the following year, bringing the total to 73,000 at the end of 2014.
Wind energy brings taxes and other revenues to rural communities, benefiting county and local services, schools, and health care and public safety facilities. With over 98 percent of all wind farms on private land, wind energy projects already deliver an additional $195 million a year in lease payments to landowners.
Earlier this week, Sen. Chuck Grassley (R-IA) penned an op-ed renewing his call for Congress to extend the tax credits, saying they “bring certainty to investment that helps boost development, sustainability and expansion of homegrown renewable energy,” and that “the facts show that bringing stability and certainty to clean energy policy is good for the economy and the environment. Championing renewable energy that’s engineered by human ingenuity and produced by human hands builds upon America’s centuries-long promise of prosperity.”
Today, more than 70 percent of congressional districts contain operating wind turbines, wind-related factories, or both, according to industry data.
Successful companies in the private sector also recognize why extending the tax credits make sense. This month, Jerry Hunter, Vice President of Infrastructure at Amazon, said his company strongly supports the extension of the tax credits when talking about his company’s decision to operate a new 208-MW wind farm that will deliver energy into the electrical grid that supplies current and future Amazon Cloud data centers:
“This agreement, and those previously in place, puts AWS on track to surpass our goal of 40 percent renewable energy globally by the end of 2016…“We’re far from being done. We’ll continue pursuing projects that deliver clean energy to the various energy grids that serve AWS data centers, we’ll continue working with our power providers to increase their renewable energy quotient, and we’ll continue to strongly encourage our partners in government to extend the tax incentives that make it more viable for renewable projects to get off the ground.”
In June this year, proposed legislation threatened to eliminate the PTC. That led to 85 companies sending a letter to Congress to protest the bill saying if passed, the bill would “take away an effective, business tax incentive that creates jobs, drives rural economic development and reduces energy costs for Americans across the country.”
Wind fosters economic development in all 50 states and has attracted over $100 billion in private investment to the U.S. economy since 2008. American wind power has created a brand new domestic manufacturing sector with over 500 facilities across 43 states.
Savings on wind power are reaching electric consumers. For example, wind energy saved consumers $1 billion over just two days across the Great Lakes and Mid-Atlantic states during the 2014 “Polar Vortex” event, by offsetting price spikes for fuel.
A March 2015 Gallup poll found 84 percent of American voters want the U.S. to put more emphasis or the same emphasis on producing domestic energy from wind. Two-thirds of Republicans and Independents wanted more emphasis.
According to Wind Vision, a new Department of Energy (DOE) report released in early 2015, with stable policy wind could supply 10 percent of the nation’s electricity demand by 2020, 20 percent by 2030 and 35 percent by 2050. By 2030, that could result in wind supporting 380,000 jobs; increase tax payments to communities to $1.8 billion a year; and increase lease payments to farmers and ranchers to $650 million a year.