Why is the Renewable Energy PTC so Important?
This month, Earth Day Network is encouraging you to take action by telling your Senators to reinstate the Renewable Energy Production Tax Credit (PTC). This tax credit allows renewable sources of energy, most importantly wind, to be cost-competitive with dirty forms of energy like oil or coal. The bill allows 2.3 cents per kilowatt hour of wind energy generated to be deducted from the generators taxes during the first ten years of production.
The Renewable Energy PTC was originally enacted in 1992 and has been renewed and expanded a number of times over the years. Most recently it was extended through December 31st, 2013 as one piece of the fiscal cliff negotiations. That date is quickly approaching, and we feel it would be a devastating blow to the wind industry if the tax credit were discontinued.
Because of the uncertainty about the PTC, the wind energy industry has not felt secure. This has resulted in premature layoffs and a lack of confidence in its long term trajectory. Last year’s extension saved an estimated 37,000 jobs and revived about 500 manufacturing facilities throughout the country. In addition, when the PTC has been allowed to temporarily expire, installations have dropped between 73% and 93%.
It is our hope that in the future the constant ebb and flow of wind turbine production can be avoided by enacting a long term policy. For the time being, we need your help to encourage your Senator to support extending the PTC.