What is the “production tax credit” for wind energy?
1.5-cent per kilowatt-hour1 production tax credit (PTC) for wind energy was included in the Energy Policy Act of 1992. Passage of the PTC reflected a recognition of the important role that wind energy can and should play in our nation’s energy mix. It also was intended to partially correct the existing tilt of the federal energy tax code, which has historically favored conventional energy technologies such as oil and coal. Generally, the credit is a business credit that applies to electricity generated from wind plants for sale at “wholesale” (i.e., to a utility or other electricity supplier which then sells the electricity to customers at “retail”). It applies to electricity produced during the first 10 years of a wind plant’s operation. The company that owns the wind plant subtracts the value of the credit from the business taxes that it would otherwise pay. The U.S. Congress recently (July 2005) extended the wind PTC to expire for the fourth time since it was created, through Decemb
