Wind energy prices reached new lows in 2014 but the sector still remains in the long run almost entirely at the mercy of tax policymakers in Congress, the Department of Energy said Monday.
The department said in a report on the industry that retail prices for wind energy have fallen to about one-third of their 2009 peak and that the source is “competitive with wholesale power prices” in the interior of the country, but warned that “a possible policy cliff awaits” wind producers.
“With the [production tax credit] now expired and its renewal uncertain, however, wind deployment beyond 2016 is also uncertain,” department officials stated.
While the report noted that historic low prices and added capacity were driven partially by technological developments, it described recent short-term growth as being “supported” by the write-off, which it called the “industry’s primary federal incentive.”
The PTC expired in 2013. It was extended in December 2014, but the renewal applied only to projects that started in 2013 and 2014, and was effectively a two week extension with mostly retroactive benefits.
Last month, the Senate Finance Committee voted to extend the PTC so that it applies to all projects started in 2015 and 2016.
The move was described by the program director of Environment America as keeping renewable energy producers on “a short leash.”
“Incentives for both pollution-free resources will dry up in 18 short months, while billions of dollars of fossil fuel subsidies remain embedded in our tax code,” Rob Sergent said.
The Department of Energy did note in its Monday report that even if Congress fails to tender reliable support through tax incentives, the wind industry could be boosted by “the prospective impacts of more-stringent EPA environmental regulations on fossil plant retirement, energy costs, and demand for clean energy.”
Read the full report here.
