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farms. In New York, the 322-MW Maple Ridge Wind Farm adds over $8 million in
property tax revenue and $1.65 million in lease payments each year. In the State of
Washington, it was estimated that with the 1,000 MW of installed wind capacity over
2,600 construction jobs and 400 long-term jobs were created. Additional local jobs are
created in industries that supply turbine components to the wind energy industry like the
recent opening of the Trinity Structural Towers plant in Clinton, Illinois4.
Government Support of Wind Energy
Government backing of wind energy has had a significant role in the high growth rates
in recent years. Governments at the Federal, State, and Local levels have taken steps
to encourage investment in wind energy. These steps have included tax credits,
research funding, energy standards, development grants and loans, and inclusion in tax
increment financing (TIF) districts. A few examples of these include the Renewable
Electricity Production Tax Credit (PTC), the Wind and Hydropower Technologies
program, state renewable portfolio standards, the Illinois Wind Energy Development
Grant Program, and net metering requirements.
Renewable Electricity Production Tax Credit (PTC)
The Renewable Electricity Production Credit (PTC) is a per kilowatt-hour tax credit for
electricity generated by qualified energy resources. Enacted as part of the Energy
Policy Act of 1992, the credit expired at the end of 2001, and was subsequently
extended in March 2002 as part of the Job Creation and Worker Assistance Act of 2002
(H.R. 3090). The tax credit then expired at the end of 2003 and was not renewed until
October 2004, as part of H.R. 1308, the Working Families Tax Relief Act of 2004,
which extended the credit through December 31, 2005. The Energy Policy Act of 2005
(H.R. 6) modified the credit and extended it through December 31, 2007. In December
2006, the credit was extended for yet another year (through December 31, 2008) by
Section 201 of the Tax Relief and Health Care Act of 2006 (H.R. 6111). An extension
of the tax credit is currently being worked on but has not been able to pass in the U.S.
Senate.
As mentioned previously, the PTC is a major factor in wind energy development. As
analyst Stow Walker of Cambridge Energy Research Associates stated to USA Today,
“The main reason for the robust growth is a federal tax credit of 2 cents per kilowatt
hour of energy produced. The tax credit lowers a developer's costs to about 7 cents per
kilowatt hour, placing wind costs on par with coal-fired plants.” The inconsistent
manner in which this credit has been implemented has led to high levels of variability in
wind energy investment in recent years as highlighted in Chart 2.
4 American Wind Energy Association, “The Difference Wind Makes.”
http://www.awea.org/pubs/factsheets/The_Difference_Wind_Makes.pdf