It’s not every day that Congress enacts legislation that meets an urgent national challenge head-on, stimulates job growth, promotes energy independence and protects the environment—without costing taxpayers a dime.
But that’s just what results from the renewable energy Production Tax Credit (PTC), the policy driver behind the rapid growth in U.S. jobs and manufacturing since 2005. The PTC is tax relief that only rewards results, and it doesn’t cost taxpayers a dime. It pays for itself, through federal, state, and local taxes paid by the expanded industry, including wind farm operators and their employees. As Republican operative Karl Rove recently said, this is a market mechanism that doesn’t pick winners and losers, merely creates the incentive for private investment needed by a growing new American industry.
And it’s working. Equipped with the PTC, the wind industry has been able to lower the cost of wind power by more than 90%, power the equivalent of nearly 13 million American homes, and foster economic development in all 50 states.
But now, the PTC is set to expire at the end of 2012, and it is crucial that it be extended immediately. Failure to extend the PTC would lead to significant job losses and roll back the progress we are making as a nation to diversify the U.S. electricity portfolio.
Wind energy is a clean, abundant, and affordable source of energy—and it is available now. An assessment by the U.S. Department of Energy under the George W. Bush Administration concluded that wind power could supply 20% of the nation’s electricity needs by 2030 and we are so far ahead of schedule to achieve that.
That would support roughly 500,000 good quality jobs in the U.S., with an annual average of more than 150,000 workers directly employed by the wind industry.
What’s more, by 2030 the U.S. wind industry could increase yearly property tax revenues to more than $1.5 billion, and annual payments to rural landowners to more than $600 million. That helps family farmers and ranchers stay on their land, 95-98% of which remains available for other uses.
The wind power potential to be tapped is gigantic: 53 trillion kilowatt-hours of electricity annually—equivalent to nearly 14 times our country’s current electricity demand. Wind is a source of clean energy that has virtually no polluting properties or side effects. It consumes no water—each year, U.S. wind installations will save the nation over 20 billion gallons of this precious resource that would otherwise be used for steam or cooling in conventional power plants. And, it will never run out.
The U.S. wind industry has added over 35% of all new generating capacity over the past five years, second only to natural gas, and more than nuclear and coal combined.
The U.S. wind industry is not only a large market for wind power capacity installations, but also a growing market for American manufacturing. Over 470 manufacturing facilities across the U.S. make components for wind turbines, and dedicated wind facilities that manufacture major components such as towers, blades and assembled nacelles can be found in every region. Now nearly 70% is made in the U.S.A.
With the threat of the PTC’s expiration, wind project developers are not making plans in the U.S. and American manufacturers are not receiving orders. Job layoffs have started already.
The wind industry is facing the recurrence of the boom-bust cycle it has seen in previous years when the PTC was allowed to expire. In the years following expiration, installations dropped between 73 and 94%, with corresponding job losses. According to Navigant Consulting, 37,000 Americans stand to lose their jobs by the end of the first quarter of 2013 if Congress does not extend the PTC.
The PTC drives energy diversity by allowing developers to secure private financing for wind projects and bring them to completion. To avoid disrupting the enormous progress this new and growing industry has made, Congress must extend the PTC.
Don’t let Congress Pull the Plug on Wind originally appeared in Green Chip Stocks. Green Chip Review is a free 2x-per-week newsletter, is the first advisory to focus exclusively on investments in alternative and renewable energies.