The Growing Renewable Energy and Efficiency Now (Green) Act includes a provision to maintain the production tax credit (PTC) at the current phaseout levels for 2019 and 2020 — 60% and 40% respectively — and then extending the credit at 60% of its original value through to the end of 2025.
Currently, the PTC is due to expire at the end of 2020.
Tailored ITC extension for offshore
Meanwhile, offshore wind developers choosing to claim the investment tax credit (ITC) rather than the PTC would not face a reduction in support levels under the proposals, but would be able to claim 30% of its original value.
The credit would instead expire for projects starting construction either after the end of 2025, or after the end of the year in which national offshore wind capacity reaches 3GW above the capacity at the start of 2021 — whichever comes later.
Like the PTC, the ITC — currently worth 18% of its original value — is due to expire at the end of 2020.
Tom Kiernan, CEO of the American Wind Energy Association (AWEA) welcomed the bill, which was introduced in the US House of Representatives by congressmen Mike Thompson and Richard Neal, both Democrats, and co-sponsored by 47 other members of Congress.
“Federal incentives for renewable energy sources have proved their value, helping our country usher in millions of dollars in economic investments and [created] over 120,000 jobs in the onshore wind industry alone," Kiernan added.
“This legislation continues these successful policies and helps unlock the full economic and environmental potential of the American wind industry.”
The impending phaseout of the PTC at the end of 2020 has sent developers scrambling to start construction or secure safe harbour status for their projects to be eligible for the tax relief.
Meanwhile, the ITC has helped lower the price of projects being developed by early movers in the US’ burgeoning offshore wind sector.
The bill will now go to committee stage, before returning to Congress to be voted on if put forward by the committee.
