The U.S. wind business has begun a push in Washington, D.C. to stage the tax-incentive enjoying subject with photo voltaic power, pivoting from its longstanding however now fading wind manufacturing tax credit score (PTC).
The American Wind Power Affiliation, the business’s major commerce group, desires to see onshore wind tasks made eligible for the funding tax credit score (ITC) at present out there to photo voltaic vegetation, mentioned AWEA chief government Tom Kiernan, talking Thursday in New York.
“What we’re up on Capitol Hill speaking about is together with wind in Part 48 [of the tax code], which is the place photo voltaic is — i.e. the ITC,” Kiernan mentioned at an occasion hosted by AWEA.
Pursuit of ITC eligibility represents a serious strategic shift for the onshore wind business, and would seem to open avenues for cooperation in addition to stress with the photo voltaic sector. Onshore wind, photo voltaic and pure gas-fired vegetation now account for just about all new technology capability constructed within the nation.
The U.S. wind business, now approaching 100 gigawatts of put in capability, secured a multi-year extension to its PTC in 2015 based mostly partially on the argument that it might be the final one.
Nonetheless, the photo voltaic business acquired what’s extensively considered as a greater deal within the extension of its ITC. The wind PTC started phasing down in 2016 for brand new tasks, however the ITC doesn’t begin its decline till subsequent yr. And whereas the PTC ultimately drops to zero, photo voltaic’s ITC is ready to stay completely at a lowered stage — a serious benefit over time.
Up till now, the wind business has seemingly been hesitant to ask for an additional PTC extension. In distinction, the photo voltaic business has overtly been calling for an additional ITC extension in absence of federal local weather and power laws.
AWEA is “speaking rather a lot about parity” with lawmakers lately, Kiernan mentioned. “Particularly inside wind, photo voltaic and storage, that are very a lot going to be central to the clear grid of the longer term.”
“On the finish of the day, it’s politically easiest, strongest, and strongest and impactful to have wind, photo voltaic and storage in the identical part of the tax code — to have parity so we’re simply charging ahead with comparable if not the identical tax assist.”
“Our long run technique is bringing all of it collectively, having parity, and getting that ITC prolonged,” Kiernan added.
On stage with Kiernan, Chris Brown, president of gross sales and companies within the U.S. and Canada at wind turbine provider Vestas, identified that photo voltaic has been asking for an ITC extension.
Kiernan’s response: “I’ve seen.”
Requested whether or not the shift would imply wind tasks would solely be eligible for the ITC going ahead and now not the PTC, Kiernan mentioned: “That’s seemingly the best way it might find yourself.”
Lengthy odds in D.C.
Business leaders are sometimes reluctant to speak concerning the aggressive tensions between wind and photo voltaic, preferring as an alternative to border the dialogue as renewables versus fossil fuels. However analysts imagine wind could have an uphill battle in opposition to photo voltaic within the 2020s if the PTC/ITC disparity is allowed to persist.
“It might undoubtedly be an issue [for wind],” mentioned Mark Goodwin, CEO of developer Apex Clear Power, which builds each wind and photo voltaic tasks. “I believe it’s even an issue from a messaging standpoint if photo voltaic will get a 30 %, 5-year extension and wind doesn’t [get an extension].”
“Once we did the section out, I strongly supported it,” Goodwin mentioned at AWEA’s occasion. However the nation wants each wind and photo voltaic to thrive within the 2020s, Goodwin mentioned, “not let one fall off due to the outdated PTC.”
Kiernan acknowledged that the chances of opening the ITC for onshore wind tasks seems to be distant within the present political local weather.
“Finish-of-year offers, particularly tax extender offers, have occurred earlier than,” he mentioned. “There’s a shot at it this yr.”
“However I truthfully don’t give it an enormous probability simply given the dynamics,” Kiernan mentioned. “The impeachment inquiry provides a complete different layer.”
No matter what occurs within the battle for tax-credit extensions, the wind market is within the midst of its all-time largest growth years. Wooden Mackenzie expects the U.S. so as to add practically 40 gigawatts of capability in 2019-21 as builders race to beat the PTC deadline.