Just a week after Texas hit another record for wind power generation, the wind industry and the green energy sector are breathing a huge sigh of relief today after Congress extended a tax credit that was set to expire.
The Renewable Electricity Production Tax Credit (PTC) has been around since 1992, and gives producers of wind, geothermal and some biomass projects a credit for each kilowatt hour of energy they make during their first ten years of operation. The one-year extension of the credit is expected to cost $12.1 billion over ten years.
As Politico reports, the extension of the credit actually improves it for the wind industry, as it “changes the language to allow any project that has begun construction by [the end of the year] to qualify for the PTC, rather than just projects operational by the deadline.” This makes the credit more effective this year, as it typically takes between 18 to 24 months to develop a new wind farm, according to the American Wind Energy Association.
That group says the tax credit extension will save 37,000 jobs. In the lead up to the expiration of the credit this week, wind projects across the country were being rushed into service before the end of year, the New York Times reported Thursday.
Texas is the top producer of wind energy in the country, with more turbines installed than any other state. On Christmas Day, Texas set another record for wind power generation as a cold front blew into the Lone Star State, with over a quarter of Texas’ power coming from wind that afternoon. It was enough power for about 4.3 million Texas homes during times of average electricity use.
Congress also extended credits for residential energy efficiency improvements, plug-in vehicles, biofuels, energy-efficient new home construction, and energy efficient-appliances.
And who knows what the fate of the wind credit will be after 2013. The wind industry has advocated a gradual phase-out of the tax credit over the next nine years in order as opposed to nixing it entirely.