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Harry Reid: I’m ‘Not Confident’ Congress Can Extend the Production Tax Credit for Wind

By Stephen Lacey  

"Harry Reid: I’m ‘Not Confident’ Congress Can Extend the Production Tax Credit for Wind"

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Senate Majority Leader Harry Reid said he’s “not confident” that Congress will be able to extend the production tax credit (PTC) for the wind industry this year.

In an interview with Climate Progress, Senator Reid (D-NV) lamented the breakdown of bi-partisan support for renewable energy, saying many conservative members of Congress were “making a concerted effort to thwart development” of clean energy.

When asked whether Congress would be able to pass even the most basic support mechanisms for renewable energy like the PTC, Reid answered: “I’m hopeful, but not confident we can get them passed.”

The PTC, which provides wind project owners 2.1 cents per kilowatt-hour of electricity produced, is a fundamental incentive for the industry. However, unlike permanent credits embedded in the tax code for oil and gas producers, the PTC is only extended every couple of years. That creates immense uncertainty in the sector in the lead-up to the expiration.

If the PTC expires, the wind industry would see a massive decline in installations, effectively choking one of the fastest-growing energy sectors in the country. During previous lapses in the tax credit, national installations fell by between 70% and 90%.

The PTC is set to expire at the end of 2012. Because it can take years to plan large wind farms, many projects are delayed or abandoned if a developer is unsure about completing the facility in time to qualify for tax credits.

Since 2009, wind developers have been able to take an investment tax credit worth 30% of a project’s cost or an equivalent 30% cash grant through the Treasury, rather than the PTC. The Treasury Grant Program has been immensely helpful to the wind industry at a time when tax equity investors (financial institutions that owe enough in taxes to acquire the credits and help fund projects) have been limited.

After a drop-off in installations in 2009 because of the financial crisis and stiff competition with cheap natural gas, the industry is rebounding. In the first half of 2011, developers doubled the amount of capacity that they put online in the first half of 2010.

But with the Treasury grant program set to expire in January and the PTC only around for another year, the wind industry is approaching the edge of a cliff.

Other industries that rely on the PTC like geothermal, biomass and hydro won’t face expiration until the end of 2013. But they too could be in a similar situation if no extension is in place before then.

It’s an all-too-common story for a sector that must deal with on-again, off-again support.

Reid said earlier this summer that any jobs package pushed by Democrats would focus heavily on clean energy jobs. And in his speeches at last week’s National Clean Energy Summit in Las Vegas, he was bullish about the long-term prospects for renewable energy in the U.S.

But off the stage, Reid was a lot more realistic about the fight within Congress over industry support.

“I would like to say we’re off and running and going to do all these great things. We’re going to try to do them. And I want to do them. But anything that we’re being asked to do is going to be hard to do.”

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10 Responses to Harry Reid: I’m ‘Not Confident’ Congress Can Extend the Production Tax Credit for Wind

  1. SecularAnimist says:

    Stephen Lacey quoted Harry Reid: “… conservative members of Congress were ‘making a concerted effort to thwart development’ of clean energy …”

    “Conservatism” in America is no longer a principled political ideology. It is a wholly-owned subsidiary of the fossil fuel corporations, and its whole and entire purpose is to protect the profits of the fossil fuel corporations for as long as possible at any cost.

  2. Cali Chris says:

    OK, Harry, we hear you. What can we do to help? Organize locally and nationally? Demonstrate widely? Write our Representatives and Senators and newspaper Letters editors? Blog? Talk it up with our friends, neighbors and relatives? Elect and re-elect as many Democrats as possible, including President Obama?

    • Ziyu says:

      Call your Senator or Representative and tell them to hold all appropriations bills hostage to passing the clean energy supports. And remember, they have to be willing to kill the hostage. It worked for the Tea Party. It can work against them.

  3. Pangolin says:

    If there ever was a year when the U.S. Senate should be calling their local university science departments and having a chat about climate change this has been the year.

    It’s not that a hurricane, a major drought, heat waves, major flooding in the Northeast and Mississippi basin, and giant outbreaks of tornados haven’t happened before. They just haven’t all happened in the same year.

    Maybe we should take a hint. Maybe the Senate Democrats could threaten to shut the country down if we don’t do something about Climate Change. Maybe even something that produces lots of jobs, like, say, installing wind turbines in depressed rural areas.

    Could we try that?

  4. John Tucker says:

    The Democratic party is a categorical disappointment.

    You create demand by facilitati­ng purchase of a required item. regulating standards and requiring improvemen­ts.

    All booms have some facet of the above if not all of them. We fail now because we do not satisfy any of the above. (except for holding off a full collapse in housing and other industries by keeping credit semi available)

  5. Sasparilla says:

    You can see the beat in the media – the Republicans want to kill Green energy (Solar and Wind) if possible.

    This is a different planet, politically than it was just 4 years ago – after destroying action on climate change the future of fossil fuel dependence is still at increased risk if we have folks making Wind Turbines and Solar Cells here in the US, expect a sustained full blown war on them (which we’ve already seen the PR) from the right (and feckless weak democrats wringing their hands and looking helpless) until they are eliminated.

    The chance of the wind PTC getting renewed with the GOP in control of any branch of government would seem very low. Lets do that for 5 or 10 years and see what we have left of our green energy sector.

    I think we will be extremely lucky not to have to be buying virtually all our green tech from China in 20 years (if we’ve come around to buying Green Tech seriously by then).

  6. Sasparilla says:

    I apologize for the double post, but wanted to add one thing.

    I would expect direct action against plug in vehicles (whether its the elimination of the tax credit as well as other things we’ll have to wait and see) – god help us if the GOP gets all three branches of government next year.

  7. Solar Jim says:

    RE: “many conservative members of Congress were “making a concerted effort to thwart development” of clean energy.”

    Identifying these (sycophantic corporate stooges) as “conservative members” is like identifying Jack The Ripper as a surgeon.

  8. Mike Keller says:

    Good ridance to a waste of taxpayer money. In most of the US, there is no need to build power plants, as demand has actually dropped. On a general note, there is no good economic reason to build unreliable power plants, as the folks in Texas learned during the recent heat waves. Wind energy was AWOL.