The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Report: A Plea For Extending a Federal Tax Incentive for Wind Energy

Efforts to get Congress to extend a wind energy production tax credit before it expires at the end of 2012 have intensified, and the latest ammunition came in a form of a government report released Tuesday touting the jobs created by the wind energy industry and the growing reliance on wind energy to meet electricity demand.

The report, written by the Lawrence Berkeley National Laboratory, noted that the 32 percent of new electric power plants added in 2011 were wind farms that required $14 billion to install. Sixty-seven percent of the equipment that went into building turbines last year came from American factories.

The country added about 6.8 gigawatts of new wind energy generation capacities in 2011, up 31 percent from 2010. The country’s total wind energy generation capacity has hit 50 gigawatts, the report said. Wind energy now can meet over 10 percent of the electricity demands in six states, including Iowa, Colorado, Oregon, Minnesota, and North and South Dakota.

The wind energy’s growth also has been built on the federal energy production tax credit, which first became available in 1992 and has been extended many times. Wind energy producers can get an income tax credit of 2.2 cents per kilowatt-hour. The American Wind Energy Association has been lobbying hard to extend the production tax credit, which is set to end on Dec. 31 this year.

The trade group issued a press release last week listing layoffs at wind manufacturing and other service companies to underscore its assertion that more job losses will occur if the production tax credit disappears. In fact, it claims that nearly half of the 75,000 jobs that are currently available in the wind business could go away along with the tax credit. 

State mandates that utilities buy an increasing amount of renewable energy have driven the wind energy industry. California installed 921 megawatts of wind energy capacity in 2011, knocking Texas off the perch. California also is where the utilities must get 33 percent of their electricity from renewable sources by 2020. California’s three big utilities – Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric – have already met an earlier, 20 percent mandate in 2011.

Wind energy development isn’t a new field, and it’s managed to reduce both the cost of building wind farms and the price of wind electricity over the years to the point that they are lower than, say, solar energy. The cost of installing wind farms in 2011 reached an average of $2.1 per watt, which was $0.10 per watt less than the cost in 2010.

Although project development and construction costs have come down, the prices for wind power haven’t dropped as quickly. Average prices for electricity from a sample of 271 wind farms (20.2 GW total) reached 5.4 cents per kilowatt-hour, compared with a low point of 3.7 cents per kilowatt-hour in 2005 (80 projects with 4 GW). Price fluctuations for wind turbines and project construction costs are key reasons for the changes in wind power prices, though lower prices could show up much later after a drop in equipment and project costs.

Most of the wind farms built in 2011 involved power purchase agreements owners signed with utilities a few years before, so the wind energy prices for 2011 didn’t seem to correspond with falling turbine prices. But the power purchase agreements signed in 2011 did contain lower prices: They reached an average of 3.5 cents per kilowatt-hour, compared with 5.9 cents per kilowatt-hour for the power purchase agreements signed in 2010 and 7.2 cents per kilowatt-hour in 2009. 

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox - FREE!

Subscribe to Renewable Energy World Magazine and our award-winning e-Newsletter to stay up to date on current news and industry trends.

 Subscribe Now



A Case Study in Energy-Transition Momentum

Tim King South Australia is clearly at the forefront of the global energy transition as it establishes a fast-moving model oth...

US Senate Democrats Unveil Energy Bill That Restores PTC and Extends ITC

Brian Eckhouse, Bloomberg Senate Democrats unveiled a bill that would provide more tax credits for renewable energy while killing some tax ince...

Sage Grouse Removed as Threat to Biggest Wind Farm in U.S.

Christopher Martin, Bloomberg Billionaire Phil Anschutz’s plans to build a $5 billion wind farm in southeast Wyoming will no longer be stymied by t...

CEO Gilles: Challenge in Geothermal is to 'Level Playing Field' with Wind, Solar

Jennifer Delony The current challenge for the geothermal energy industry is what U.S. Geothermal CEO Dennis Gilles calls “leveling th...


Array Technologies Finalizes Shipments to E.ON’s Maricopa West Solar Project

Array Technologies, Inc. (ATI) has completed DuraTrack® HZ shipments to the 20 MW (ac) ...

B.C. Energy Minister to provide keynote at renewables for mines summit.

BC Minister of Energy and Mines to address the challenges of providing alternative powe...

Mining leaders seek renewables solutions at Toronto Summit

The global mining sector is facing a tough business environment with low commodity pric...

American Renewable Energy Institute Gears Up for 12th Annual Summit

"Racing Climate Change: Green Bridge with China, The Road to Paris” is the theme of th...


New Mexico Attracts Jobs and Revenues with Renewable Energy Tax Credit

New Mexico has abundant fossil fuel resources: in 2013, it ranked sixth in the nation for crude oil production, seven...

The Vice President Stole My Show (Not Really)

When I finished my Solar Power International (SPI) panel discussing what future opportunities the panelists saw in so...

The Value Of The Building

If you’re selling efficiency solutions in the built environment, you may find yourself being asked by your pros...

Sewage provides energy through processing

Many nations are investing in new technology to turn sewage waste into usable energy. Japan has recently revised its ...


Ucilia Wang is a California-based freelance journalist who writes about renewable energy. She previously was the associate editor at Greentech Media and a staff writer covering the semiconductor industry at Red Herring. In addition to Renewable En...


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Doing Business in Europe – in partnership with GWEC, the Global Win...

There is now 128.8 GW of installed wind energy capacity in the EU (appro...

JuiceBox Energy Certified Installer Class

JuiceBox Energy is rapidly building out its national certified installer...

Wind Operator Congress Europe

The UK’s only business-focused O&M event for the European wind...


Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

Koch Professor drops his Koch title, still makes same errors plus s...

The Koch Professor’s title isn’t the only thing that’s...

Fact Check: AWEA represents American wind power

The American Wind Energy Association (AWEA) is proud of its members for ...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now