President Obama wants the renewable energy production tax credit (PTC) renewed and is talking it up today during a visit to TPI Composites, a wind turbine blade manufacturer in Iowa.
He’s been pushing Congress to act and has made it a top policy priority, including it as #4 on his 5 point "To Do List" for Congress.
Also part of #4 is extending the 30% tax credit for manufacturers that make cleantech equipment, such as renewable energy components and building efficiency products (48C Advanced Energy Manufacturing Tax Credit) that provided over $2 billion under the Recovery Act.
Yesterday, top White House energy aide Heather Zichal told reporters there are too many jobs on the line to let the PTC expire at the end of this year.
Even the US Chamber of Commerce and the National Association of Manufacturers support renewing the PTC, along with people from both sides of the aisle in Congress.
Wind installations rose 52% in the first quarter of 2012 (from Q1 2011), the most productive yet, as developers raced to get projects in the ground before the PTC expires.
The industry is projected to grow to 100,000 wind jobs in just four years – if it’s allowed to expire, the industry will contract by 37,000 jobs.
We haven’t reported on many of them, but we’ve seen a slew of planned wind manufacturing plants and projects cancelled because the PTC hasn’t been renewed. That’s already affecting domestic manufacturers as orders dry up.
The last five years have been marked by unprecedented policy stability," says Denise Bode, AWEA CEO. In previous years, when the PTC was allowed to expire, installations dropped 73%-93%, resulting in major job losses.
Created in 1992, the PTC gives wind farms a credit of 2.2 cents per kilowatt hour of energy produced, spurring an annual $15.5 billion over the last five years in private investment.
Over the years, the PTC has been through boom and bust, but it’s often renewed just before expiration. Although it has bipartisan support – the windiest states happen to be "red" states – it faces bigger hurdles this year, as does the manufacturing credit, from the GOP and it’s oil industry backers.
We think it’s time for a lot of these provisions to go away," James Valvo, policy director at the Koch Bros-backed Americans for Prosperity, told LA Times.
"The [production tax credit] has been in place for 20 years," Valvo said. "I think that’s plenty of time to find out if these industries can stand on their own."
We have to wonder then, why fossil fuel industries, which have been subsidized for 100 years, aren’t voluntarily giving them up!
Sen. John Thune (R-SD), for example, told reporters he supports the PTC, but its costs would have to be offset elsewhere and the wind industry needs to offer a way to phase it out. He said lawmakers are discussing various tax provisions that need to be extended, and would present a package before the November elections.
Legislation to extend the PTC has been introduced twice this year, and failed.
Read about the PTC, what it’s accomplished, and who supports it:
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Why make such a big deal about Iowa? Texas is by far the biggest wind energy producer in the US. Shouldn’t the speech have been delivered there?
As for the federal PTC renewal, the real roadblock is the Democrat-controlled Senate. And unfortunately, the federal PTC subsidies do not have a great fiscal track record at “producing jobs”. The federal PTC has produced a relatively small number of US jobs in proportion to the massive amounts of taxpayer money spent. The $billions of tax dollars handed out in PTCs does not come for free. Every dollar used for the PTC is a dollar taken out of the private sector economy.
Lastly, it’s a bit disingenuous to compare tax write-offs for oil/gas exploration expenses to federal PTC cash subsidy payments. Rather than complain about the Koch Bros., consider the cozy relationship between the CEO of the largest wind energy company in the US (Jeff Immelt at GE) and the Obama administration.