Wind incentive

More wind power can be expected in the US now that the US House and Senate has approved a 1.5 cent-per-kilowatt-hour tax credit for wind power installations.

More wind power can be expected in the US now that the US House and Senate has approved a 1.5 cent-per-kilowatt-hour tax credit (adjusted annually for inflation) for electricity generated with wind turbines.

The US wind energy Production Tax Credit (PTC), as it is called, is a critical factor in financing new wind power installations.

The PTC, which had expired on December 31, 2003, will now be extended retroactively from that date to December 31, 2005.

An even longer term extension (to December 31, 2006) has been proposed in a new bill still pending before the US Congress. This bill also calls for creation of a new tax credit to encourage the use of small wind systems for homes, farms and small businesses.

The delay in extending the PTC came following a banner year for the US wind industry, in which it installed a near-record 1,687MW of generating capacity – enough to serve nearly half a million American homes.

This year, a sharp drop in new installations is expected due to the absence of the incentive for nine months.