The fiscal cliff bill approved by Congress includes an extension of the wind energy tax credit. The executive director of the Iowa Wind Energy Association, Harold Prior, says the bill not only extends the credits, but it has important language regarding the completion of projects.
“That in progress language basically indicates that for any wind farm project that has begun construction and are consistently working on completing construction, will be allowed to be eligible for the federal production tax credit through the end of 2014 and actually a few months potentially into 2015,” Prior says.
He says they are still sorting out all the impact on wind energy. Prior says right now much of it has to do with rules that haven’t been written yet, but he says they are encouraged that it really extends the credit by two-and-a-half years.
Prior says there was a wild flury of activity as the year drew to a close and companies tried to get wind projects done in fear of the expiring credit. “Under the old rules, the project had to be completed and the wind turbines had to be commissioned. In other words, they had to be started up and checked out to make sure they were fully functional,” Prior says.
Some companies that produce parts for the wind turbines laid off workers in anticipation the construction would come to a halt. Prior says there were projects that had all the paperwork done and were ready to build, but held off buying turbines for fear they would not be completed in time to qualify for the credit.
“So I’m guessing we’ll have a fair number of projects in Iowa and across the nation that are at a stage where they can basically be ordering the components that they need,” Prior says. “And the question will be, you know, how fast can our manufacturers ramp up production to meet the orders they should be receiving as they start this 2013.”
He also thinks projects that were just in the planning stages will get going again too. “They’ve got at least 12, maybe up to 18 months to complete the project and still qualify for 10 years of federal production tax credits,” according to Prior. “I think what that’s going to create — and it’s really hard to predict industry by industry — I think it’s certainly going to create the adding back of a number of jobs in the near term, and the ramping up of production.
An annual report released in August found Iowa is second behind only Texas in U.S. wind energy production.