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Saturday, Jan 19 2013 02:18 PM

Wind tax credit breathes life into local economy

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Extension of the wind tax credit as part of the so-called "fiscal cliff" legislation passed earlier this month is expected to keep wind development in Kern County going. Tehachapi News photo by Ed Gordon

While the wind energy industry was celebrating a victory to begin the New Year, local wind developers and manufacturers were making plans to ramp back up.

With the inclusion of Production Tax Credit extensions in the tax relief bill approved by Congress on Jan. 1 as part of the "fiscal cliff" deal, wind energy and ethanol producers will continue to receive an income tax credit of 2.2 cents per kilowatt-hour for the first 10 years of electricity production from large-scale wind turbines, which officially expired on Dec. 31.

The bill allows companies to apply for the credit if they begin construction on a plant in 2013 and finish it by the end of 2014. Earlier versions would have required construction to be finished by the end of the year to qualify for the credit.

The credit is important for the continued economic success of Kern County, particularly eastern Kern including Tehachapi.

"Together we can celebrate the renewal of this important federal policy that supports an industry that installed the most electrical generating capacity in America last year," said Linda Parker of the Kern Wind Energy Association. "Now it is our task and our privilege to keep providing America with more clean, affordable, homegrown energy, and thousands of jobs."

The wind industry employs about 75,000 workers worldwide, and according to the American Wind Energy Association as many as 37,000 jobs could have been lost beginning in the first quarter of the year if the production tax credit had not been renewed.

But the passing of he measure may not mean any jobs already lost will come back anytime soon.

While Buddy Cummings CEO of Tehachapi-based World Wind & Solar is grateful and thankful for the extension of the energy tax credit, he said the first half of 2013 looks to be very slow due to the fact that the extension didn't get approved earlier.

"Developers and manufactures will need time to ramp back up," he said. "Hopefully, in the near future, we will achieve a five-year tax credit that will allow the industry a true runway for growth, technological advances and cost minimization."

Meanwhile, Jeff Ciachurski, President of Western Wind Energy near Cameron and Tehachapi Willow Springs Roads said that not only did Congress extend the Production Tax Credit, it also extended the Investment Tax Credit and Bonus Depreciation.

"In essence, the U.S. Treasury is paying for 30 percent of the capital costs of a wind project in the country," Ciachurski said. "This amount is hugely significant and infers that the United States is still the number one place in the world to be building, owning and operating wind and solar facilities."

When discussions over the PTC stalled in Washington over the final months of 2012, wind farm builders raced to start their turbines spinning before the deadline in order to qualify for the credit.

Thanks to that push, the Energy Information Administration estimated that the industry would set a record for total wind power installations in the U.S., potentially topping 12,000 megawatts of installed capacity.

The country topped the 50,000 megawatts milestone of total installed capacity earlier in the year.

Windstar wind turbines

Photo by Ed Gordon/Tehachapi News

Wind Turbines located along Willow Springs Rd. near Cameron Rd.

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2014/11/19
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