Strong 2015 Performance Has Wind Energy Developers Looking to the Future

With 2015 turning out to be a record-breaking year for renewable energy generation–utility-scale renewables making up 60% of new energy capacity–we can’t help but speculate how past variability in federal support for wind energy will fare for future wind development projects. Since the finalization of the Clean Power Plan, industry analysts have juggled the possible outcomes if Congress decides whether to reinstate the Production Tax Credit (PTC), which rewards wind developers for every MWh they produce, and what this will entail for states’ compliance with the Clean Power Plan (CPP).

Here are our main takeaways about PTC extension and CPP compliance:

• While momentum continues to build and prices of electricity are falling in the wind power market, wind energy developers remain cautious to jump start new projects under uncertain federal tax credit support.
• With the EPA’s Clean Power Plan requiring states to reduce emissions from the power sector, access to cheap wind power will become essential to widespread compliance with the rule.
• Allowing the PTC to continue for the AWEA recommended 5-year extension will result in wind energy becoming cost competitive across most of the United States, reinforcing the business case for switching to cleaner sources of energy.

While experts including U.S. Energy Secretary Moniz and CEO of Pattern Energy Group point out that economies of scale and improved technologies make it likely that renewable energy will still have a place in the market, expiration of the PTC will subject the wind energy industry to risk and price fluctuation. Maintaining the PTC is the best way to ensure steady growth in renewables we need to reach renewable requirements and emissions reductions. To learn more about renewable energy tax credits see this blog from a few weeks back.

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