US House approves PTC renewal

The US House of Representatives voted on 03 December 2014 in favour of a bill that will extend dozens of expired tax breaks through to the end of 2014, including those that support renewable energy sources, such as the Production Tax Credit (PTC).

• The Production Tax Credit (PTC) pays 2.3 cents/kWh during the first 10 years of wind farm operation. 
• The Investment Tax Credit (ITC) - another tax break to support renewable energy - is worth up to 30% of the costs of developing and building wind projects.

The bill, the Tax Increase Prevention Act of 2014 (H.R. 5771), will extend by one year certain tax credits that expired on 31 December 2013.

Long-term phaseout of the PTC was not supported
The bill was presented on Monday following last week’s collapse of bipartisan negotiations around a package that would have included a longer-term phaseout of the PTC, which primarily benefits the wind industry. The phaseout was originally proposed as a way to wean wind producers off the tax credit.

Eligible projects
The tax breaks adopted on Wednesday include credits to support projects in renewable energy, biofuels and energy efficiency. They are on offer to projects under construction before the credit expires (31.12.2014) or where companies have made a minimum “safe harbor” investment to secure eligibility, meaning some new projects could qualify.

Industry views
Political action group, Governors’ Wind Energy Coalition, stated on Tuesday that wind industry lobbyists believe the extension does not go far enough for companies in the wind industry, as it often takes longer than one year to get projects in the ground.
When the PTC expired in 2013, new wind installations came to a halt, resulting in a 92% drop in new wind projects compared to 2012, a $23bn drop in private investment and nearly 30,000 American jobs were lost, according to the American Wind Energy Association.

Source:Clean Energy Pipeline and ReNews