Wind Tax Break Worth Extending

By Will Nissen

This post originally appeared on July 12th on the MN 2020 blog and is reposted with permission. MN2020 is a nonpartisan, progressive think tank focusing on the issues that really matter: education, health care, transportation and economic development.

Business folks will tell you that it’s not necessarily regulations or taxes that get in their way; it’s unpredictable regulations and taxes. With the chance to establish stability for a key Minnesota industry, wind, Congress should enact a three-year extension of the federal wind production tax credit (PTC), due to expire in less than six months.

It has broad bipartisan support, so what’s the problem?

Extending the PTC for three years would allow technology to improve, see the cost to deliver wind to market to go down, and give Congress the chance to assess whether the industry still needs the PTC in 2015. It would also avoid placing the next debate over extension in the throes of national electoral politics.

The White House and Congressional progressives have been pushing for the wind PTC for some time, with one White House official recently saying that 37,000 U.S. jobs may be lost next year if Congress does not extend the credit. In addition, House Republicans recently pushed House leaders for an immediate extension of the wind PTC at the federal level. And Senators from both sides of the aisle in Midwest states recognize the huge importance of the credit to the wind industry in their jurisdictions.

But because of the uncertainty caused by inaction and heel-dragging at the federal level, wind companies have been forced to pull back on wind projects, manufacturing and investment. Unable to setup current business models beyond 2013, many wind developers have slowed plans to develop next year. One leading wind company CEO predicted that the industry will fall by 80% in 2013.

We’re already seeing this drop. A wind parts manufacturer in eastern Wisconsin will close its factory at the end of August, laying off 45 workers in a town of 1,256. Gamesa, a leading wind parts manufacturer, announced it will temporarily layoff 165 workers in two of its Pennsylvania plants due to uncertainty over the PTC. And recently, the world’s leading wind developers have begun moving their money to places outside the U.S. that offer more stable investments in wind energy.

The wind industry as a whole has brought as much as $20 billion in private investment to the U.S. and employed roughly 75,000 workers over the last 5 years, during the worst economic times since the Great Depression. Failing to support the industry at this critical time in its domestic growth would be a mistake.

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