Economics of wind 1. What is the “production tax credit” for wind energy?
In 1992, the Energy Policy Act include a 1.5-cent/kWh* production tax credit (PTC) for wind energy. Extension of the PTC in early 2002 was recognition of the important role that wind energy played 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. This PTC has been renewed annual since although there have been times when it lapsed and cause great uncertainty in the industry. Generally, the credit is a business credit that applies to electricity generated from wind plants for sale at wholesale. It applies to electricity produced during the first ten years of a wind plant’s operation.
