Thursday, September 20, 2012

Wind Sector Hurting From Cloud Over Tax Credits

Current U.S. law gives wind-power producers a tax credit of 2.2 cents per kilowatt-hour, a subsidy that keeps wind energy competitive with other methods of generating electricity. The tax credit is set to expire at the end of the year.  Wind turbine manufacturers are laying off employees and downsizing because of questions about the extension of the tax credit.  Low natural gas prices are also leading electricity producers to turn to that fuel for generation.

A bipartisan group of lawmakers in Congress is pushing to extend the credit, while many Republicans say the cost—an estimated $12 billion through 2022—is too high. In the past, the credit has been renewed for one- or two-year periods. Congress isn't expected to act on the tax credit until after the November elections, and it is unclear if the House and Senate will be able to reach a deal during the lame-duck session.

President Barack Obama supports renewing the tax credit and Mitt Romney opposes extending the credit.

An additional challenge for some U.S. manufacturers is foreign competition from low-cost producers. (WSJ, 9/19/2012)

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