The U.S. Production Tax Credit (PTC) is credited with driving the market in the U.S., which overtook Germany in 2008 as the nation with the most wind energy capacity installed.[1][2] However, the problem with the PTC is that wind developers had to bundle these credits with other financial instruments (such as accelerated depreciation) and securitize them, selling them to investors. Given the current economic downturn, the revenue stream has decreased[3]. This decline in financing options was addressed by a key provision of the American Recovery and Reinvestment Act (ARRA), signed into law by President Obama in February 2009.
The ARRA included a three-year extension of the PTC, but also introduced a new program that allows renewable energy developers to secure a grant from the U.S. Treasury in the amount of a 30% Investment Tax Credit (ITC)[4]. This alternative to the PTC is considered key to continue the growth of the wind industry. Projects would have to begin construction by 2010 and finish by 2012 to qualify for the grant.[5] The ARRA also removed the $4,000 cap on small wind energy projects (less than 100 kW), allowing investors to claim a full 30% ITC. The new law authorized a 30% credit for investment in a "qualified advanced energy manufacturing project." It also contained $1.6 billion in new clean renewable energy bonds for public power providers, electric cooperatives, and tribal governments.[6]
While the Department of Treasury (DoT) is responsible for managing the PTC and ITC programs noted above, the Department of Energy (DOE) is the federal agency with perhaps the most direct hand in promoting wind energy, through its Wind and Hydropower Technologies Program.[7] This involves funding R&D and providing loan guarantees for renewable energy projects. Title VI of the Energy Independence and Security Act of 2008 (EISA, P.L. 110-140) directs DOE to conduct several new programs to accelerate the development of renewable energy technologies. However, the FY 2009 continuing appropriations bill (P.L. 110-329) does not include new funding to cover the cost of these programs.[8] DOE works in this space through its EERE and NREL.
Among the states, eight have established Renewable Portfolio Standards (RPS) that have accelerated the push for renewable energy projects.[9] California has implemented very aggressive programs for renewable energy, including wind energy. The state uses a public goods charge on ratepayer electricity use to fund renewable energy development and deployment programs. California’s electricity shortages in 2000 and 2001 prompted the state to expand its renewable energy programs, which has been reinforced by concern over climate change. Recent actions include a goal of increasing renewable electricity production to 33% of total production by 2020.[10]
