Renewable energy has been growing significantly across the United States in recent years. The economic downturn that impacted many sectors also impacted renewable energy but since then the industry has bounced back. The increasing prevalence and success of the renewable energy sectors is largely attributed to government incentives.
The production tax credit is set to expire at the end of 2012. However, the production tax credit requires wind farms to be operational prior to the 2012 deadline, so with permits, construction and other slowdowns any wind farm not currently in the works is unlikely to benefit. The production tax credit gives wind farms 2.2 cents per kilowatt-hour of energy produced. This applies for the first ten years the wind farm is in production. The tax credit has been in existence since 1999 but has been renewed three times.
The U.S. officially has more than 50 gigawatts of wind energy installed across the nation which is approximately equivalent to the energy needed to power 13 million U.S. homes. In the first quarter of 2012, the U.S. installed 1.695 gigawatts of wind energy. In the first two quarters of 2012, the U.S. has seen wind installations increase by 34 percent compared to 2011.
According to those in the industry, when the tax credit expires, the year following experiences an installation decrease of seventy percent compared to the year before. Wind experts believe that if the production tax credit is not renewed soon there will be a significant decrease in investments between 2012 and 2013. Their statistics indicate that investments in 2012 would be $15.6 billion while 2013 would likely fall to $5.5 billion.
In addition to the financial losses, wind industry lobby groups indicate that upwards of 37,000 jobs may be lost in the wind sector in the first four months of 2013 without an extension. Many jobs have already been lost at manufacturing plants in Colorado, Iowa and Pennsylvania, major locations for wind energy manufacturing.
Despite an atmosphere of cutting costs and disagreements in Washington, D.C., many senators have indicated that they would like to see the wind tax extended. Senators and governors from states hosting considerable wind energy investments are currently working to push the tax credit through Congress. Due to heavy opposition from the Republican party for renewable energy, the tax credit extension is said to be facing an uphill battle. It is likely to be known in the next few weeks whether the extension is granted, however, if it is not the negative impacts will likely be quickly felt in early 2013.