Remove Caps on Wind Energy
Please support the House proposal to remove the cost caps in the small wind turbine investment tax credit (ITC). The House Ways and Means Committee’s economic stimulus bill includes a provision that would help homeowners and businesses generate their own clean electricity by providing a true, uncapped ITC for the purchase of small wind turbines.
The “Emergency Economic Stabilization Act of 2008” (H.R. 1424) enacted on October 3, 2008, provides a 30% ITC to consumers for the purchase and installation of small wind systems used for individual homes and farms. However, the law imposes various cost caps that render the true amount of this credit far below 30% of a system’s cost, sometimes to as little as 1%, while providing an uncapped credit to its market counterpart, solar photovoltaics (PV). Removing these cost caps will provide homeowners, farmers, and small businesses with the assistance they need to generate their own renewable energy; put the industry on equal policy footing with the solar PV industry; and spur unprecedented growth in the market for this U.S.-dominated technology.
Removing the credit’s cost caps will:
1. Give Small Wind Parity With Solar PV: The small wind and solar PV industries share an identical market, but are treated very differently under federal policy. A federal ITC for solar PV first became available in 2005 and imposed no cost cap for commercial applications, while small wind received no federal assistance. Solar PV now receives an uncapped 30% ITC for both commercial and residential applications. U.S. manufacturers say that uncapping the ITC for small wind in both sectors could lead to 80% annual domestic growth, compared to 14% currently.
2. Create More Jobs in a U.S.-Led Industry: Ninety-eight percent of small wind systems sold in the U.S. are made by U.S. manufacturers. U.S. manufacturers also comprise nearly 2/3 of global sales. However, more favorable government policies in the United Kingdom and elsewhere are threatening the United States’ leadership status. Uncapping the small-wind ITC will establish new companies, help create green jobs throughout the U.S., and keep the industry U.S.-dominated.
3. Make the Credit Work: The caps render the true value of the credit far below 30% of the cost of small-wind installations, which seriously weakens the effectiveness of the credit. As the following chart shows, the more clean energy a small turbine is capable of producing, the smaller the effective amount of the credit becomes. For example, the $4,000 credit cap makes the ITC only 1% of the cost of a 100kW turbine.
Thank you for considering this important issue.
The “Emergency Economic Stabilization Act of 2008” (H.R. 1424) enacted on October 3, 2008, provides a 30% ITC to consumers for the purchase and installation of small wind systems used for individual homes and farms. However, the law imposes various cost caps that render the true amount of this credit far below 30% of a system’s cost, sometimes to as little as 1%, while providing an uncapped credit to its market counterpart, solar photovoltaics (PV). Removing these cost caps will provide homeowners, farmers, and small businesses with the assistance they need to generate their own renewable energy; put the industry on equal policy footing with the solar PV industry; and spur unprecedented growth in the market for this U.S.-dominated technology.
Removing the credit’s cost caps will:
1. Give Small Wind Parity With Solar PV: The small wind and solar PV industries share an identical market, but are treated very differently under federal policy. A federal ITC for solar PV first became available in 2005 and imposed no cost cap for commercial applications, while small wind received no federal assistance. Solar PV now receives an uncapped 30% ITC for both commercial and residential applications. U.S. manufacturers say that uncapping the ITC for small wind in both sectors could lead to 80% annual domestic growth, compared to 14% currently.
2. Create More Jobs in a U.S.-Led Industry: Ninety-eight percent of small wind systems sold in the U.S. are made by U.S. manufacturers. U.S. manufacturers also comprise nearly 2/3 of global sales. However, more favorable government policies in the United Kingdom and elsewhere are threatening the United States’ leadership status. Uncapping the small-wind ITC will establish new companies, help create green jobs throughout the U.S., and keep the industry U.S.-dominated.
3. Make the Credit Work: The caps render the true value of the credit far below 30% of the cost of small-wind installations, which seriously weakens the effectiveness of the credit. As the following chart shows, the more clean energy a small turbine is capable of producing, the smaller the effective amount of the credit becomes. For example, the $4,000 credit cap makes the ITC only 1% of the cost of a 100kW turbine.
Thank you for considering this important issue.
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