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PTC Extended

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For those who missed this, Maria Energia ran a brief story about a one-year PTC extension.

The PTC is now available through December 31, 2008, giving the wind sector two full years of tax stability. The U.S. wind energy sector has been plagued by inconsistent growth because of the short-term, temporary nature of the PTC.

The PTC is crucial because it makes wind competitive with other sources of electricity generation. If you are going to build a wind turbine, the PTC is a tax credit of $.019 per kilowatt hour of energy produced. However, to qualify for the PTC, you have to begin producing power before it expires. I believe the tax credit is guaranteed for 10 years.

Thus, the extension of the PTC before it expires is very important to encouraging the wind industry. If the PTC were to expire in 6 months, few would contract to build new wind because it takes too long to build and it would begin producing power over the PTC expired.

Extending it early avoids the boom-and-bust model that has hurt the wind sector in the U.S. I think many of us would like to see it extended for several years in order to encourage firms to actually build factories to produce wind turbines here rather than having them mostly imported.