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Obama Approves Extension of Wind Industry Tax Credit

by Brenda Evans, published

Wind turbines

President Obama and Congress approved a one-year extension of a wind industry tax credit included in the fiscal cliff deal.

The deal includes a “tax extender” that provides a 2.2-cent per kilowatt hour tax credit for energy produced at wind farms.

According to the American Wind Energy Association (AWEA) press release, wind set a new record in 2012 by installing 44 percent of all new electrical generating capacity in America and leading the electric sector. Natural gas only carried 30 percent while coal and other sources had even less.

Companies were unsure if the credit would be extended which created a premature downturn in the industry. According to AWEA, a national trade association representing the industry, companies idled factories because of a lack of orders for 2013, resulting in numerous layoffs.

The so called "boom-bust cycle," created by yearly tax credits, has effected the industry for decades. With an expiration date of 2014 on this credit, the halting of construction is expected to happen again.

The AWEA proposed a six-year phase-out of the credit, but is also a strong proponent of the credit because it understands the immediate implications.

"We've always said we won't need forever," Ellen Carey, an association spokeswoman, told USA Today. "We need to have a glide-path to keep the success."

In the closing days of the congressional session, the AWEA and industry workers pressed policy makers to extend the tax credit.

“Behind the wind mills, there’s families and behind those families, we need jobs,” the daughter of an industry worker, Tiffany Allsup, said in a video-plea to Congress.

According to the AWEA, 37,000 out of the 75,000 American jobs in wind energy and hundreds of U.S. factories in the supply chain would have been at stake had the credits been allowed to expire.

Former CEO of AWEA, Denise Bode, thanked Obama and Congress for extending the wind industry tax credit. Her successor, Rob Gramlich (AWEA's interim CEO as of Wednesday), looks forward to moving on with upcoming projects:

"Now we can continue to provide America with more clean, affordable, homegrown energy, and keep growing a new manufacturing sector that's now making nearly 70 percent of our wind turbines in the U.S.A.."

The U.S. Department of Energy has projected that wind energy could supply up to 20 percent of America's electricity by 2030 and industry workers want to keep that goal on track.

Scott Clavenna, CEO of Greentech Media, told NPR that a change in the 2013 tax credit says firms only have to begin projects before 2014, not finish them. Clavenna said that this means industry players now have time to start planning for time consuming projects again.

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