As the New York Times recently reported, certain tax credits that were included in the Energy Policy Act of 1992 (P.L. 102-486) are set to expire at the end of this year unless Congress acts to extend them. Of particular importance to producers of wind turbines is the production tax credit, which is estimated to cost approximately $6.8 Billion per year and has been shown to encourage investment in new wind projects that might otherwise be economically unfeasible. Indeed, the nation’s leading provider of wind power, Xcel, issued an update in which it stated wind generation may not be a cost-effective investment without the tax credit.
Despite the potential benefits to wind power, extending any tax credits would be very controversial given the current state of affairs in Washington. Developers will just have to hold their breath to find out whether any of the hot air coming out of Congress will find its way into the wind industry in the form of a tax credit extension.