It is sort of ironic how things go in the long run. Germany and Canada mostly Ontario adopted green energy policies and pushed for the development, but they were too early when costs were still high and as governments do, too much regulation and rules..
The high costs and excessive government regulation to try and promote green energy did more harm than good. While in the U.S. they implemented very few regulations and gave just one tax credit.
Systems Commencing construction after December 31, 2016 receive what is called a Production Tax credit:
Wind: $0.0184/kWh for first 10 years of operation All other technologies: Not eligible
Over the years the credit has been increased with an inflation adjustment so as of 2016 it was at $0.023/kWh
It is gradually being reduced significantly
The tax credit is phased down for wind facilities and expires for other technologies commencing construction after December 31, 2016. The phase-down for wind facilities is described as a percentage reduction in the tax credit amount described above:
- For wind facilities commencing construction in 2017, the PTC amount is reduced by 20%
- For wind facilities commencing construction in 2018, the PTC amount is reduced by 40%
- For wind facilities commencing construction in 2019, the PTC amount is reduced by 60%
Note that the exact amount of the production tax credit for the tax years 2017-2019 will depend on the inflation-adjustment factor used by the IRS in the respective tax years.
After these reductions it is going to be down to about half a cent, not very significant at first glance, but when you consider falling electrical energy prices it will still be a benefit.
I put in excerpts from two different 3rd party studies at Business Council for Sustainable Energy and Bloomberg New Energy Finance and another by Berkeley Labs.
2016 set a record for lowest energy costs in the U.S. and renewable s are contributing to this.
U.S. wind energy investment rose 11 percent, to $15.5 billion, while “energy smart technologies” such as smart grid and electric vehicles saw investment rise 5 percent to $10.6 billion.
Prepared by the Electricity Markets & Policy Group at Lawrence Berkeley National Laboratory (Berkeley Lab) for the US Department of Energy, the Wind Technologies Market Report confirmed several existing conclusions made in recent months about the US wind industry in 2015, and revealed several more. Prime among these conclusions is confirmation that wind prices are at an all time low, with newly built wind projects in the US averaging around 2¢/kWh thanks to technology advancements and cost reductions across the wind industry.
You can see that half cent tax credit could pay 25% of the 2 cent cost.
|
