Wind energy companies breathed a sigh of relief when a deal was finally struck on the fiscal cliff and legislation to extend tax credits was signed into law on January 2.

Seen as a significant victory for green energy overall, the renewal of Production Tax Credits (PTC) for new wind farm startups was arguably the most significant win.

Back in 2008, the Department of Energy reported that wind power could supply up to 20% of all US energy by 2030 if increased investment was placed into the nation’s transmission system and continuing reductions to wind capital costs were made. Since that time President Obama has taken important strides to push his green agenda, and it’s fair to say that the fiscal cliff has actually helped that.

So the deal maintains the subsidy of 2.2-cent-per-kilowatt hour for wind projects. It has extended the PTC expiry date to January 1, 2014. However, a notable change to the language in the legislation on the ‘extension for wind facilities’ has thrown the industry an extra life buoy.

New wind farms beginning construction “before January 1, 2014” are now eligible for a tax break rather than only those completed “before January 1, 2014”. Because of this it’s believed it could cause a significant spur in the number of wind farms being built towards the end of 2013, many of which might not even become operational until 2015 or even later.

The Joint Committee on Taxation now estimates that the extension alone could cost taxpayers in the region of $12 billion in the coming decade. This means the new subsidy, breaking down to $1.2 billion each year, will go on top of the estimated $10 billion being spent annually for wind farms already in operation and entitled to these subsidies.

Overall it’s good news for green energy and for those working in the industry. And it’s not just US companies that can revel in the wake of the deal.

Across the border, Canadian national newspaper the Globe and Mail recently wrote that many companies last year were ‘loathe to plan new wind farms when they didn’t know if the tax credits would continue’. Some even enforced cutbacks and layoffs.

Now companies, such as the Vancouver-based Western Wind Energy Corp, have the benefit of knowing they have “a number of projects in the works in the United States” for the year ahead.

No doubt 2013 will be an opportune time for many companies working in wind power in the US. However with industry rules constantly chopping and changing, the question is how long will this last?

Our award-winning ZEMA Suite has been designed so to ensure you can gain access to the right data you need to run timely and accurate market analyses of our ever changing wind power industry.

Our example below shows how you can analyze wind generation in real time using ZEMA (ERCOT Vs MISO).

Figure 1. ERCOT Wind Generation May 1, 2012 – Jan 14, 2013 (Graph created with ZEMA)

Figure 2. MISO Wind Generation May 1, 2012 – Jan 14, 2013 (Graph created with ZEMA)