Facing expiring tax credit, wind industry posts record year

The threat of an expiring wind power credit helped drive record installations of equipment and caused record wind capacity in the United States last year, the American Wind Energy Association (AWEA) said Wednesday.

Wind accounted for 13,124 megawatts of new power in 2012, more than any other energy source, AWEA said. Most of that — 8,380 megawatts — came in the fourth quarter as Congress let the clock tick down on the wind production tax credit.

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With that in mind, AWEA and wind industry supporters in Congress — largely Democrats, with some Republicans — will push for a five-year phase-out of the credit this Congress to provide some investment certainty.

While the 2.2-cent per kilowatt-hour credit expired on Dec. 31, Congress extended it another year in a “fiscal cliff” deal.

The industry brought in $25 billion of private investment in 2012, but planned projects for this year took a dip because it was unclear whether Congress would extend the wind tax credit.

Plans for a longer term phase-out will likely run into GOP opposition.

Some Republicans were incensed by a language change that enables wind projects to collect the credit if they begin construction this year, rather than come into service. It remains uncertain what qualifies as beginning construction.

The credit’s GOP detractors said the alteration amounts to an expansion of the program, with the one-year extension of the credit costing $12.1 billion through 10 years.

The change already has attracted concern from House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.), who has pledged to take a look at the credit.