Greg noted earlier today what our tough economic times might mean for alternative energy.
Wind developers have anxiously awaited Congress’ decision of whether to renew wind energy’s cushy tax credits, which were set to expire at the end of the year. But the financial bailout has saved the day! U.S. News & World Report recently noted that
The federal tax credits for wind and solar energy were set to expire in December. Until Friday afternoon, they had not been renewed. That changed with the passage of the $700 billion bailout bill by the House. That bill, like the successful Senate version, includes renewal of the tax credits. Dozens of large wind and solar projects, originally scheduled to be built in 2009, had been put on hold as developers waited for Washington to act. Now, once again, they may start to move forward.
Back in July, I wrote,
Each year that the Production Tax Credit lapsed (2000, 2002, 2004), new wind energy investment dropped considerably from the prior year: drops of 93 percent, 73 percent, and 77 percent, respectively. Even more drastic were the drops in wind-energy investment in Texas, the nation’s leader in installed wind-power capacity: In 2000, only one MW of wind capacity was added, and in 2002 and 2004, zero MW.
This history strongly suggests that, had the tax credits expired, new wind-energy investment would have tanked and current projects likely would have stalled. The financial landscape may be different these days, but the lure of a 2-cents-per-kWh tax credit will continue to drive wind-energy development, regardless of wind energy’s inability to thrive without government handouts.