Currently, the wind industry has a Production Tax Credit, or PTC. Started in 1992, it’s a 10-year credit that kicks in once a wind project comes online. In 2015, there was a bipartisan move to slowly bring an end to the credit, which was supported by
the wind industry.
Construction projects were still eligible for the full 100 percent credit if they qualified in 2016. But once the year ended, the credits started phasing out. Projects in 2017 received 80 percent of the credit, dropping to 60 percent in 2018 and 40 percent in 2019. The credit disappears in 2020.
Companies could ensure their projects qualified for the full credit by either starting construction or by spending 5 percent of the end total construction costs before the first deadline. (One caveat: The project must be finished in four years.) Many companies took the 5 percent route, typically buying wind turbines and storing them.
But the House bill retroactively changes the rules of the game, the wind industry says. Projects that chose the 5 percent route no longer qualify. That means all the projects that put in last-minute orders for turbines at the end of 2016 (there were a lot) no longer qualify for the full 100 percent credit.
The best they could hope for is the 2017 credit limit. That is if they can get the construction project going in time.
Additionally, the value of the credit dropped. Instead of the current inflation-adjusted $24 per megawatt hour, projects would be working with a $15 per megawatt hour credit.
Another fear is that the House bill requires construction to be continuous, which is interpreted to mean no pauses.