Tax policy can be an important driver that prompts private investment, benefits the U.S. economy and creates new jobs. Just as tax treatment for other energy sources has enabled growth and development, the Production Tax Credit (PTC) helped wind developers access the capital needed to build new wind projects.
The PTC was originally authored by Senator Chuck Grassley (R-Iowa) and former Representative Phil Sharp (D-IN) as part of energy legislation in 1992. The PTC helped launch the wind industry as we know it. However, at times a lack of policy certainty around the PTC hampered the growth of American wind power. For many years, Congress cycled through the tax credit in one or two-year stints and allowed it to expire multiple times. This cyclical pattern resulted in boom-bust cycles of development.
In December 2015, with strong bipartisan support, Congress agreed to a stable phase-out of the PTC to be completed by 2019. This long-term policy certainty created a business environment primed for growth, which benefits American families and businesses. The PTC was extended at the end of 2019 at 60 percent of its value. Because of this, today over 120,000 Americans across all 50 states work in wind.
Achievements under the PTC
The PTC is a successful policy, spurring investment and the establishment of a U.S. manufacturing base that helped drive U.S. wind power costs down by 70 percent over the last decade.
Investing in U.S. wind farms has spurred over $143 billion in private investment in our economy over the last 10 years.
Wind energy supports over 120,000 well-paying jobs, including many manufacturing, construction, and technical jobs across the country.
Over 26,000 U.S. workers in more than 530 factories across 43 states build wind-related parts and materials.
Wind power employs veterans at a 61 percent higher rate than the national average.
Wind projects pay over $1.6 billion in state and local taxes and landowner lease payments every year.
Around 70 percent of all wind projects are located in low-income counties where land lease payments, tax payments, and jobs boost local economic prospects.
Joint Committee on Taxation (JTC) projections through 2025 show that when wind energy incentives phase out as scheduled, wind energy will only account for about 6 percent of the total, cumulative federal energy incentives.
Growth in the wind industry is expected to remain strong when the PTC is fully phased-out. Because the PTC has been successful in helping establish a reliable, competitive domestic wind industry, wind will continue to expand capacity and deliver economic benefits for Americans and their communities.