Debate over the Renewable Energy Production Tax Credit Surges on as Program Is Renewed for 2013
March 4, 2013
The Renewable Energy Production Tax Credit (PTC), set to expire December 31, 2012, was renewed for another year, extending the discussion about what incentives the government should provide for renewable energy. Several renewable energy technologies apply to the federal, corporate tax credit program, including: wind, hydroelectric, geothermal, biomass, landfill gas, tidal, ocean thermal, municipal solid waste, and hydrokinetic. The incentive is a per-kilowatt-hour tax credit for electricity generated by the aforementioned technologies. The incentives typically apply to the first ten years of operation.
The deadline for construction on these projections is now December 31, 2013, and the different renewable technologies carry the following incentive amounts:
Resource Type
Credit Amount
Wind
$ 0.022/kWh
Hydroelectric
$ 0.011/kWh
Geothermal
$ 0.022/kWh
Biomass (Closed Loop)
$ 0.022/kWh
Biomass (Opened Loop)
$ 0.011/kWh
Landfill Gas
$ 0.011/kWh
Tidal
$ 0.011/kWh
Ocean Thermal
$ 0.011/kWh
Municipal Solid Waste
$ 0.011/kWh
Hydrokinetic
$ 0.011/kWh
Although renewable energy incentives have not been consistently successful, recent incentives have created opportunities for wind and solar especially as costs for these technologies have decreased. During this time period, jobs in manufacture, construction and maintenance of these renewable technologies have risen. Towards the end of 2012, the debate on whether to extend the PTC heightened, each side lobbying for Congress to support their point of view. For example, the American Wind Energy Association (AWEA) was one of the organizations actively favoring a renewal of the PTC. In a report, the AWEA said extending the PTC would save 37,000 jobs and keep 500 wind factories busy. Supporters of the other side, however, like Exelon, a power generator company, argued that the PTC should not have been extended because wind was being competitive on its own. The wind production, the company asserted, was competing against Exelon’s nuclear resources (Exelon is the largest holder of nuclear power resources and has significant wind power resources). Both sides in the argument are trying to create certainty in the markets for renewable energy incentives, and the debate will continue throughout the year. The implementation of a clearly defined renewable energy policy is crucial to achieve a consistently higher usage of alternative energy sources.
