Wind energy tax credit expires Dec. 31 - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

Wind energy tax credit expires Dec. 31

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Amarillo, TX - As the deadline for a 'fiscal cliff' resolution draws nearer, many wind energy projects across the panhandle and the nation are in limbo.

Texas leads the nation in wind energy production and potential, and the industry has seen meteoric growth over the last two decades.  In fact, wind generation in the state increased twelvefold in the last ten years.

Much of that growth can be attributed to the Production Tax Credit, which allows producers to reduce costs by up to ninety percent in some cases.  But now that tax cut may be lost amid the financial fallout if our nation's lawmakers can't avert the looming 'fiscal cliff.'

The Production Tax Credit was established in 1992 to help spur new growth in wind energy capacity in our search for renewable energy sources.  Congress has approved or denied the credit over the years, and Class 4 Winds Executive Director A.J. Swope says growth is directly related to incentive.

"We've seen that every year the Production Tax Credit has been renewed or put in place, that industry-wide growth has been in place.  We've seen in years that the tax credit has not been renewed, wind farm development has either come to a halt or slowed dramatically."

Cielo Wind Power, an Austin-based company, has projects scattered across our area, in places like White Deer, Wildorado, Texico, and Lubbock.  Walter Hornaday, the company's president, says he has a current project near Vega that should be completed before the end of the year, when the credit is set to expire.

And until a fiscal resolution is reached on the federal level, new construction is on standby.

Hornaday says the lack of jobs in a thriving industry is one of his biggest concerns, saying, "It's disappointing that it's literally tens of thousands of jobs in Texas that are being lost, and hundreds of thousands of jobs across the U.S. associated with the wind power business are on the chopping block."

But because the cost of materials and construction has fallen dramatically in recent years, analysts contend the credit itself is less important than knowing whether or not it will be there to plan future projects.

"The industry is calling for some sort of certainty, some decision to be made," explains Swope, "whether that's a renewal of the Production Tax Credit, whether that's a phase-out, which is starting to be looked at by several legislators, or if it's not going to happen at all, but certainty in this situation is really of the utmost importance."

Critics of the credit say it allows producers to underbid their competitors, while proponents counter wind is the only energy industry that is currently not subsidized by the federal government.

"There are government incentives for coal and gas and nuclear and solar, but not for wind as of the end of this year," says Hornaday, "so it's just odd to be in an industry that outperforms everyone else as far as no pollution footprint and creating jobs, but it's the one left out as far as a subsidy in place."

Texas also leads the nation in oil and gas production, and is also the biggest consumer of energy.

If you'd like to see Texas' most recent renewable energy report or learn more about wind energy and its impact, follow the links attached to this story.