This is the last year wind energy projects can qualify for the federal production tax credit (PTC), but at 40% or 1¢/kwh, it’s unlikely the subsidy will drive the construction of many new megawatts. Current development activity is mainly tied to projects that safe-harbored turbines in 2016 (100% PTC), 2017 (80%) and some in 2018 (60%) and must be operational before the end of 2020, 2021, and 2022 respectively. Projects unable to meet these deadlines have a negative outlook.
Logistical issues relating to turbine and equipment deliveries could impact the number of MWs installed. This is due largely to fewer MWs constructed in 2017 and 2018 relative to safe-harbored turbines leaving only 1½ - 2 years for a substantial amount of proposed wind to be placed in service. Targeted communities are experiencing intense pressure right now as wind developers lose patience over delays. Some projects are certain to be cancelled. Windaction is also tracking possible increases in project-related accidents and component failures similar to those reported in 2012 when the Section 1603 cash grants sunset. Rushed development raises legitimate public safety concerns.
Despite positive press to the contrary, losing the PTC could prove a blow to Big Wind. Low natural gas prices and competition from other renewable energy projects (including wind) have placed significant downward pressure on the price project owners can demand for their wind energy. These low prices are balanced by the enormity of the PTC’s value relative to project cost. At full value, the PTC with depreciation deductions totals around 50 percent of project cost. New projects will have to fill the void left when the PTC expires. Turning to conventional project finance will mean raising prices making wind power less competitive. There is already evidence that prices are going up.
It’s possible Congress may extend the PTC but the chances of success are limited. Opening the public purse again for an industry that'had 5-years to plan is a tough sell. This is especially true if cost matters.
Under the current scheme, the annual cost of the PTC (wind) and ITC (solar) combined exceeds $9 billion in 2021 before tapering off. In total, the cost of the PTC/ITC is estimated at $60.7 billion from 2020 through to 2029. To put this into perspective, the PTC and ITC represent the two most expensive energy subsidies and combined are the 39th most expensive federal expenditures of the Treasury out of 165 line items. Any extension of the PTC would further increase these costs.
|ESTIMATES OF TOTAL INCOME TAX EXPENDITURES FOR FISCAL YEARS 2019-2029
(in millions of dollars)
Table totals from corporations and individuals (Source: US Department of Treasury)
As deadlines near, project developers could seek concessions from the IRS regarding the 4-year construction window but we would expect any consideration to be consistent with the excused delays outlined in the agency’s 2013-29 notice relating to events outside a developer’s control (i.e. weather conditions, natural disasters, and delays in obtaining permits or licenses from federal, state, local, or Indian tribal governments). For example, Vineyard Wind, which hopes to install 800 MW of wind off the shores of Massachusetts, is pressing the IRS for an extension due to delays in securing a positive decision on its EIS. 
It should be noted that the IRS recently amended its guidance pertaining to national security concerns. Projects delayed due to military objections are now eligible for additional time (up to 4 years) from the IRS.
In another month, the wind PTC will finally expire after twenty-seven years. Taxpayers will still be on the hook for billions more in PTCs through the next decade but the burden should not increase. In that time, the wind industry has grown significantly reaching over 100,000 MW and now mainstreamed into the US electricity market. Big Wind is no longer a nascent industry, but one that must stand on its own, whether it's ready or not.
 Wind energy developers have the option of making an irrevocable election to receive a 30% investment tax credit in lieu of the PTC. For offshore, this is the more likely scenario given the high capital cost to construct projects. Under the phase-down, the ITC benefit is similarly reduced.