Written by John P. McMullan.
In 2012, more than 13,000 MWs of wind turbines were installed domestically; less than 100MWs of wind turbines were installed in the first three quarters of 2013. What explains the tremendous decline in wind installations?
The answer is policy uncertainty that confronts the primary federal support for the wind energy industry – the 2.3-cent-per-kWh production tax credit (PTC). The PTC was scheduled to expire for wind farms that were not complete by Dec. 31, 2012, but was extended in January 2013 to benefit projects that began construction by Dec. 31, 2013. Prospective wind farms that could be completed by the original Dec. 31, 2012 deadline were built and little work was done on wind farms that could not achieve the end of 2012 deadline due to the policy uncertainty. With the January 2013 extension (which applies to projects that began rather than completed construction in 2013), we can expect a meaningful uptick in wind farm installations coming online in 2014 and early 2015, with another decline to follow absent further extension of the PTC or the creation of another subsidy regime.
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