Is Wind Industry Running Out Of Breath?

Iowa Farm Scene

Iowa officials are pushing hard for extension of federal tax credit for production of wind energy

Published on: November 13, 2012

Uncertainty over the future of the wind energy tax credit has already cost Iowa hundreds of jobs. Supporters of the subsidy say many more jobs could be lost if Congress doesn't vote to extend the controversial measure which expires at the end of 2012. The wind industry has been promoted by states such as Iowa as a way to create jobs, reduce the nation's dependence on foreign energy and to promote investment in clean, renewable energy.

Iowa Gov. Terry Branstad and Iowa U.S. Sen. Chuck Grassley were participants in a press conference with other wind energy supporters in Washington, D.C. on November 13 to generate support to try to get Congress to extend the tax credit. Branstad is chairman of the U.S. Governors' Wind Energy Coalition. He and Grassley were joined by officials from other "wind energy" states at the press conference.

WIND FARMS: The wind industry employs about 7,000 people in Iowa, as the state has several factories that make wind turbines and related parts. Also, Iowa ranks second to Texas for installed wind generating capacity. About 20% of Iowas electricity is now generated by wind. Over the past 20 years nearly 3,000 wind turbines have been erected on more than 100 wind farms statewide.
WIND FARMS: The wind industry employs about 7,000 people in Iowa, as the state has several factories that make wind turbines and related parts. Also, Iowa ranks second to Texas for installed wind generating capacity. About 20% of Iowa's electricity is now generated by wind. Over the past 20 years nearly 3,000 wind turbines have been erected on more than 100 wind farms statewide.

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The Production Tax Credit is scheduled to expire December 31, 2012. Supporters of the credit are warning that allowing it to expire will hurt the wind industry and local economies that benefit from the wind industry. With only six weeks left before the credit end and Congress facing a full workload of other pressing matters such as the federal budget fiscal-cliff and a number of tax issues, an extension of the wind tax credit is very unsure.

Tax credit for wind energy has given Iowa economy a good lift
The American Wind Energy Association has warned that if Congress doesn't renew the tax break, that failure could result in the loss of 37,000 jobs in the U.S. The tax credit, which has had bipartisan support throughout its 20 year history, provides a subsidy of 2.2 cents per kilowatt hour to the wind industry. The tax break goes to the producers of electricity from wind. They are the ones who buy the turbines and build the wind farms and lease the sites from farmers where the wind farms are located. The wind farms pay local property taxes, too, helping support schools and providing funds for other local needs.

The tax credit has been a big help for Iowa's economy, says Branstad. The state, which now generates about 20% of its power from wind, has wind turbine and blade manufacturing plants at Fort Madison, West Branch, Cedar Rapids and Newton that employ thousands of workers.

Opponents of the tax break say it is a waste of money. The American Energy Alliance (a lobby group funded by the coal industry) says the wind industry is strong enough to stand on its own and doesn't need government support. The alliance says the tax credit was created in 1992 to help the wind industry get established. "Yet 20 years later, there is little to show for it," says a press release issued by the alliance. "The U.S. government is still providing a $5 billion special tax break for an industry that supplies only 2% of our nation's power."