PCCA Journal|1
st
Quarter 2013
46
More Questions in the Wind
FINALWORD
M
any PCCA contrac-
tors and vendors
have been work-
ing extensively in
the wind energy
market in recent years, so we have been
watching the wind energy tax credit
debate very closely. The good news for
these PCCA members, as I’m sure most
everyone knows by now, is that Con-
gress included an extension of wind en-
ergy tax credits in the much-publicized
legislation to avert the “fiscal cliff” on
January 2. The extension included a new
provision that allows wind projects to
qualify for the credits if they begin con-
struction in 2013, rather than needing to
be operational by the end of the year as
under previous law.
But the news has not been all posi-
tive for the wind industry, as numerous
questions about the tax credits linger,
their opponents remain mobilized, and
the credits are scheduled to expire again
on December 31.
The new provision on when proj-
ects qualify for the credits has raised
the most questions on Capitol Hill,
with some lawmakers arguing that it
will greatly expand the program and
the federal budget deficit. The IRS and
the Treasury Department are currently
evaluating how to interpret language in
the new law, as is the House Oversight
and Government Reform Committee’s
Subcommittee on Energy Policy, Health
Care, and Entitlements.
Subcommittee Chairman James Lank-
ford (R-Okla.) told the congressional
publication
The Hill
, “There’s no clarifi-
cation yet as to what under construction
means....We are going to look at that as
a committee because that is an unde-
fined area...and we want to be sure we
bring some clarity to that.”
The wind production tax credit is once
again scheduled to expire on December
31, and a repeat of the year-long debate
and last-minute decision is highly pos-
sible. The wind industry wants a long-
term extension that would provide some
predictability for investors, but with a
divided Congress and continuing grid-
lock in Washington, that seems unlikely.
A more likely scenario might be a
long-term phase-out of the program that
would ramp down the credit over several
years. In December, the American Wind
Energy Association discussed a tax credit
that would start at 100 percent of the
current 2.2 cents a kilowatt-hour for
projects started in 2013, and be phased
down to 90 percent of that value for
projects placed in service in 2014, 80
percent in 2015, 70 percent in 2016, and
60 percent in both 2017 and 2018, end-
ing after that. AWEA said that scenario
would allow wind energy to establish a
stable base market in the U.S. that the
industry can build on with further mar-
ket and technology innovation.
The phase-out proposal might be a
compromise that finds support in Con-
gress and is certainly one that PCCA will
be watching in the months ahead.
TimWagner, PCCA Executive Vice President
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