United States

United States

US legislators urge subsidy action

UNITED STATES: Pressure is building on the US government as 144 lawmakers put their names to an open letter calling for the reinstatement of subsidies for wind power generation.

Member of both the Senate and the House of Representatives signed the letter
Member of both the Senate and the House of Representatives signed the letter

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The bipartisan group of legislators was led by senators Mark Udall (Democrat) and Chuck Grassley (Republican) and representatives Steve King (Republican) and Dave Loebsack (Democrat).

In the letter, the lawmakers warn that the wind industry, including 559 factories involved in manufacturing parts for turbines, is under threat due to the policy uncertainty.

The production tax credit (PTC) and investment tax credit (ITC) expired at the end of last year, leaving the country without a national subsidy system for wind power.

The signatories urged policy "certainty and predictability so that long-term project decisions and investments can be made."

At the start of last year, the government passed an extension of the subsidies and a change in the conditions to allow projects under construction, rather than only those generating power, to qualify. This led to a boom in projects under construction at the end of last year.

However, it is feared that if a subsidy regime is not reintroduced, this increase in construction could prove little more than a spike. Installations in 2013 fell 92% due to the anticipation of a policy gap.

The PTC provides up-front tax relief of $0.023/kWh for the first ten years of a project, while the ITC allows the claiming back of 30% of initial investment in a project. Developers could only qualify for one of the subsidy schemes.

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