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Peter Lehner’s Blog

Victory for Renewable Energy in Fiscal Cliff Deal

Peter Lehner

Posted January 4, 2013 in U.S. Law and Policy

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Some 37,000 wind energy jobs hung in the balance when the renewable energy production tax credit (PTC) expired on Tuesday. But in its last-minute deal to avert the fiscal cliff, Congress included a short-term extension of the credit, giving the nascent wind industry a brief window of opportunity to continue its growth and create more jobs in the clean energy sector. The development and operation of a single large wind farm can create more than 1,000 jobs.

By ensuring that the production tax credit was included in the fiscal cliff package, President Obama and the provision's backers in Congress--including Senator Majority Leader Harry Reid and Finance Chair Max Baucus--are responding to widespread American support for clean energy. A recent Hart Research poll indicated that 9 out of 10 Americans, including a vast majority of Republicans and Independents, think developing renewable energy should be a priority.

The wind energy industry has expanded rapidly in the past decade, and employs about 75,000 Americans, many of them in manufacturing. But at the end of 2012, new job announcements in the wind industry fell off the jobs cliff, largely because of uncertainty in the marketplace about the tax credit.

"It's hard to expand your business and create new jobs with this much political uncertainty," said wind farm developer Jacob Susman, founder and CEO of OwnEnergy in Brooklyn, New York.

Businesses need clarity and stability in the marketplace in order to make strategic investments. With the tax credit ensured, developers and investors can move forward with confidence, at least for the next two years. And people across the country will continue to benefit from renewable energy development in their communities.

Nearly 500 factories supply parts to the wind industry, in places like Cedar Rapids, Iowa, where new wind companies have created 460 manufacturing jobs and a technician training program at a local community college. In rural Livingston County, Illinois and Sherman County, Oregon, landowners pull in an extra $8,000 each year by leasing land for wind turbines, while they continue to farm and ranch. The production tax credit helped wind energy companies gain a foothold in these communities, and economic benefits have been widespread.

Encouraging renewable energy development also helps protect our health, by moving us away from polluting fossil fuels and towards a cleaner energy supply. The wind energy we produce today is already clearing our air, by avoiding the release of 65 million tons of carbon dioxide, 75,000 metric tons of sulfur dioxide emissions and 50,000 metric tons of nitrogen oxide emissions annually—emissions that are linked to cancer, lung disease, heart attacks, asthma, and climate disruption. As wind energy production continues to increase, our energy mix becomes cleaner, and greener, saving lives and billions of dollars in health costs.

Clean energy is good for this country--for the economy, our health, and our environment--and it deserves our support. A brief extension of the production tax credit will help ensure that more clean, renewable energy will come on line over the next two years. However, the extension provides little in terms of long-term stability, especially when compared to the solid century of government support for the oil and gas industry, and the $4 billion annual taxpayer subsidy that industry currently enjoys.

The federal government has always played an important role in energy development. Extending the production tax credit for renewable energy, despite the tangled negotiations surrounding the fiscal cliff, was certainly a positive step. As budget negotiations continue, Congress needs to find a way to signal, both to industry and to the American people, that the pursuit of clean energy is a national priority.  

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Comments

Environmental EngineerJan 4 2013 04:06 PM

I find it sad that you celebrate the intentional corruption of rational economics and tax policy. You quite correctly state that businesses need clarity and stability in the marketplace to make strategic investments. Will a short-term extension of an unsustainable tax credit help to achieve that? Investors are savy enough to realise that the tax man can giveth or take away. It is a near certainty that a few years of operating history will provide ample evidence that wind energy will dramatically increase energy costs. Public support will vanish along with the subsidy. That is happening now in Britain.

Bill CarsonJan 5 2013 08:57 AM

Production Tax Credits are good for renewable energy if it's a good investment and economically feasible.

The commercial wind turbines installed in the last 5 years have shown a catastrophic failure in their gear box system that cost up to one million to repair every three to five years and again even after repairs are made.

A commercial wind turbine today costs around 5 million today and without the PTC , Production Tax Credit these turbines would never be bullt . The PTC is really you and I the taxpayers paying a wind turbine contractor with tax breaks and renewable energy credits to install megawatt commercial wind turbines.

Commercial wind turbines in New England are a bunco scheme that the media should do some investigative reporting on. Commercial turbines in Princeton ,Massachusetts -Portsmouth High School in Rhode Island have had major catastrophic failures now at Otis ANG Base, Cape Cod a 2009 turbine is just starting to have a gear box problem along with the Falmouth Wind 1 turbine having electrical problems.
These three year old wind turbines are creating another industry repairing the turbines!

On the health issue thousands of noise complaints have been made in Fairhaven, Falmouth, Kingston and Scituate . It's clear that many towns planned 660 KW turbines and then switched to megawatt turbines three times the size of original plans . Noise reports about infra sound and low frequency noise have been in the news for years .Residents in Falmouth have left their homes or moved to basements .

The construction of wind turbines in Fairhaven, Falmouth, Kingston and Scituate have quickly gone to court and local health boards . The commercial wind turbines being sited in and around residential property isn't working out . The only answer may be to vote against local and state officials who support taking your health away from us.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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