Insight
The U.S. Wind Energy Production Tax Credit – time for a change
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The wind energy Production Tax Credit (PTC) has driven expansive development of wind power in the United States. However, more recently the PTC has skewed wind deployment into areas that probably didn’t need it, while shortchanging other areas. In some areas excess wind power is disrupting power markets. With tax policy support scheduled to decline for both the wind and solar industries, a reasonable joint extension policy should recognize that they do not need perpetual support.
Table of contents
- Key Takeaways
- Introduction
- Historical trends in wind power development and pricing
- The wind PTC subsidy is actually growing , but unequally
- Big winners of the recent PTC extensions
- Market impacts of the PTC gold rush
- Unintended consequences and buyer’s remorse?
- It is time to replace the wind PTC with a phased-out ITC for all mature renewable technologies, plus additional support for immature technologies
Tables and charts
This report includes the following images and tables:
- Figure 1 Historical Wind PPA Prices 1996-January 2014
- Figure 2 Location of U.S. wind farms operational after mid-2013 or under construction
- Figure 3 Wind PTC revenue as a percentage of unsubsidized levelized costs
- Figure 4 Estimated State PTC Revenues From Recent and Under Construction Wind Farms
- Figure 5 MISO-MidAmerican Zone Real-time Prices and Weighted Wind Revenue
- Figure 6 Correlation between hourly MISO wind generation and MidAmerican Implied Heat Rates
- Figure 7 ERCOT HUB Real-time Prices and Weighted Wind Revenue
- Figure 8 Correlation between hourly ERCOT wind generation and ERCOT Implied Heat Rates
- Figure 9 H1 LTO historical and forecast capacity prices for selected Midwest zones (2015 $/kW-yr)
- Figure 10 Estimated wind LCOE using PTC versus using 25% ITC
What's included
This report contains:
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