Wind production tax credit extended

Some good news (though not unalloyed) for South Dakota’s considerable wind energy potential:

The one-year extension of a key tax break could provide a jolt for the wind industry, but developers say other obstacles remain in South Dakota.

A bill passed New Year’s Day to avert the so-called fiscal cliff also contained a long list of tax breaks, among them the Production Tax Credit. That gives financiers of wind projects a $22 credit for every megawatt-hour of power produced from a utility-scale wind turbine.

This credit can account for as much as one-third of a wind farm’s financing, and uncertainty about its extension had left developers scrambling to finish projects before the deadline.

Howard wind turbines

Wind turbines outside Howard, SD

But this same uncertainty about the Production Tax Credit’s eleventh-hour extension means that developers were unwilling to invest in new renewable energy projects in our state, despite the fact that we are #5 in the nation for potential wind energy production. Happily, projects only need to be started before 2014 in order to be eligible for the tax credit to apply (and not finished, as was previously the case), which will hopefully provide incentive for more wind projects later this year.

As with so much of the “fiscal cliff” deal, this is only a short-term solution, and it doesn’t address the challenges facing South Dakota’s tribes, who simultaneously have access to prime real estate for wind energy development and must navigate a tangle of bureaucratic and economic limitations in order to tap into it. But if we want to create clean energy jobs for a 21st century economy (instead of going the way of North Dakota’s fracking boom, though I’m sure state officials would very much like that), then extending the Production Tax Credit is a crucial first step.

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About sdpeacejustice

The SD Peace & Justice Center connects a grassroots network of South Dakotans working for social justice and against violence and oppression.
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