Wind energy construction in the United States is at an all-time high, but the industry warned Thursday the start of new projects this year is uncertain as Congress considers whether to extend a two-decade-old tax credit that expired at the end of last year.
The American Wind Industry Association said more than 12,000 megawatts of wind power, a record, were under construction at the end of 2013. Four projects totaling 269.11 megawatts were built in California last year and two in Colorado totaling 31.8 megawatts.
Tom Kiernan, chief executive with the American Wind Energy Association, told reporters the industry has been mired in a “boom to bust cycle” during the past few years as Congress has considered what to do with a wind tax credit in place since 1992 and extended nine times since then.
The wind tax credit lapsed at the end of 2012 before being renewed early last year. It expired again at the end of 2013, but many in the wind industry expect it to be renewed this year.
Still, the uncertainty early in 2013 yielded a sharp slowdown in wind projects before things increased dramatically in the fourth quarter. An estimated 11,000 megawatts of construction activity started during the last three months of 2013, constituting about 91 percent of the total currently underway. Wind producers are bracing for a similar pattern in 2014.
Wind construction projects typically start in the spring, so the longer it takes Congress to renew the production tax credit the larger the impact will be on the industry, AWEA officials said.
The credit provided a 2.3-cent-per-kilowatt-hour benefit for electricity generated from utility-scale turbines during the first 10 years of a facility’s operation. Renewable energy projects that started construction before Dec. 31 were eligible for the tax credit. The wind provision is one of about 50 tax credits that expired Dec. 31.