U.S. Wind Tax Credit Extended in Fiscal Cliff Compromise

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The last-minute tax deal brokered by U.S. lawmakers to avert the so-called “fiscal cliff” included a one-year extension of the wind energy tax credit, a subsidy that industry officials say is critical for the growth of the wind energy sector.

The bill, which now awaits President Obama’s signature, preserves the 2.2-cents-per-kilowatt-hour credit for all wind energy projects that begin construction in 2013, allowing projects that are not completed until 2014 to qualify, as well.

While the wind energy sector achieved record growth in 2012 — accounting for 44 percent of all new electricity generating capacity in the U.S. — industry leaders say the possible expiration of the tax credit forced some turbine manufacturers to idle factories and lay off workers during the latter half of 2012.

The lack of a long-term federal policy has created “a ‘boom-bust’ cycle” in the wind energy sector for more than a decade, according to the American Wind Energy Association (AWEA), a trade organization.

Article appearing courtesy Yale Environment 360.

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Yale Environment 360 is an online magazine offering opinion, analysis, reporting and debate on global environmental issues. We feature original articles by scientists, journalists, environmentalists, academics, policy makers, and business people, as well as multimedia content and a daily digest of major environmental news. Yale Environment 360 is published by the Yale School of Forestry & Environmental Studies and Yale University. We are funded in part by the Gordon and Betty Moore Foundation and by the John D. and Catherine T. MacArthur Foundation. The opinions and views expressed in Yale Environment 360 are those of the authors and not of the Yale School of Forestry & Environmental Studies or of Yale University.

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