Production Tax Credit extension and expansion
Congress has restored the vitally important federal renewable energy Production Tax Credit (PTC) for wind and biomass energy, and expanded the credit to new sources. The PTC expired at the end of 2003, eliminating 1.8 cents per kilowatt-hour credit for electricity produced from wind; closed-loop biomass and poultry waste and caused a dramatic slow down in wind projects around the country. Throughout 2004, efforts to extend and expand the PTC were held hostage to an expensive and polluting energy bill that ultimately died in the U.S. Senate. However, UCS, working with our allies in the renewables industry, helped to extract the needed tax incentives language from the stalled bill and insert them in a must-pass piece of legislation relating to foreign trade (HR 4520).
The bill, which President Bush signed into law on October 22, 2004, includes only a one-year PTC extension and expands the eligible electricity resources to include geothermal energy, solar energy, open-loop biomass, small irrigation power, as well as municipal solid waste. The wind industry estimates that during 2005 alone, the extension will generate between $2-3 billion in new investments.
