The Taxpayer Relief Act of 2012 also known as the fiscal cliff deal is now the law of the land. Despite all the ugliness behind passage of the law, there were some good things in it for our climate particularly wind energy and energy efficiency. Congress extended expiring tax credits for those industries at the insistence of the White House.
The Production Tax Credit for wind (PTC) was extended for one more year the White House confirmed Thursday in a release. The credit will apply to all wind turbine projects that are started in 2013 even if they go online in 2014. The tax credit that expired Tuesday covered only projects up and running in 2012.
The credit amounts to 2.2 cents per KW of energy produced in the first ten years of the project’s life. Experts in the industry say that 30% of the value of a wind energy project is derived from the PTC. A study conducted by the consulting firm Navigant concluded that the PTC leverages private investment equal to between $10 billion and $15 billion a year in the wind industry. They predicted that if the credit is extended one year there will be another GW of wind energy installed in the next year because of the credit.
Had Congress allowed the PTC to expire, Navigant said only 2 GW of new wind energy would be added in 2013 and a large percentage of the 71,000 persons employed in the industry now would lose their jobs. Many already were laid off because of the uncertainty caused by the 112th Congress waiting until after the credit technically expired before they extended it.
In Colorado last year wind energy accounted for 17% of all electricity used by XCEL Energy customers. That is 4 times the national average. Wind energy is important to Colorado’s economy.
There were other climate-friendly credits extended as well as reported by the Energy Effiency Business Coalition (EEBC). The 10% tax credit for energy efficiency improvement to homes was extended. This provides homeowners a credit equal to 10% of the cost of qualified energy-efficiency improvements including windows, doors, and wall and ceiling insulation. It also covers certain furnaces, air conditioners, and heat pumps. It is retroactive to 2012, but they must be installed in 2013.
The tax credit for energy efficient appliances was also extended. This credit goes to the manufacturers of qualified energy efficient appliances. The purpose being the credit is to incent manufacturers to provide more energy efficient appliances, and hopefully, pass some of the savings on to consumers in lower prices to induce consumers into buying green.
Another credit that was extended was the credit available to home-builders who design and build energy efficient homes. A $2000 credit is available to home builders who build homes projected to save at least 50% of the heating and cooling energy of a comparable home that meets the standards of the 2004 International Energy Conservation Code.
A $1000 credit is available to manufactured home producers for models that save 30% or that qualify for the federal Energy Star Homes program. These credits are available for buildings or systems placed in service before December 31, 2013.
In addition, incandescent light bulbs are beginning their phase-out in 2013 to be replaced by energy efficient CFL and LECD bulbs.
The extension of these credits and elimination of the 19th century light bulbs will help reduce the amount of heat-trapping carbon pollution dumped into the atmosphere. Carbon pollution traps heat and warms the oceans. This is the major contributor to climate change responsible for many of the extreme weather events that have plagued our nation.
The cleanest energy is energy that is never used.
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