U.S. Wind Power Slows Thanks to Tax Policy Meant to Boost It
U.S. Wind Growth Slows Thanks to Tax Policy Meant to Boost It
(Bloomberg) -- U.S. wind-power installations dipped for the second consecutive year in 2017, thanks to tax policies aimed at boosting the use of clean energy.
Got that? Congress extended in late 2015 a key tax credit for wind. The new timeline let developers qualify for the full benefit with projects that begin construction by the end of 2016; the prior rule had applied to wind farms that began work by the end of 2014.
That kind of years-long stability has taken some of the pressure off wind companies to complete new power plants, said Alex Morgan, a New York-based analyst at Bloomberg New Energy Finance.
The falloff last year “makes sense because 2016 was supposed to be the end of basically a 2-year build window,” Morgan said. “We’ll see another peak in 2020 likely as projects rush to come on line.”
Developers installed 7 gigawatts of turbines last year, down from 8.2 gigawatts in 2016, the American Wind Energy Association said Tuesday in its 2017 market report. There’s now almost 90 gigawatts of wind power in operation, enough to power about 26 million U.S. homes. Wind power generated 6.3 percent of U.S. electricity last year, the trade group said in a statement.
Wind installations are expected to rebound to about 8.1 gigawatts this year, Morgan said. The Washington-based wind association didn’t provide a 2018 estimate in its report.
Other highlights from the report:
- Almost 5,500 megawatts of wind power-purchase agreements were signed in 2017 by utilities and commercial and industrial customers. More than 2,300 megawatts of new PPAs were announced in the first two months of 2018.
- More than 52 gigawatts of wind power was added around the world last year. The U.S. was the second-largest market, behind China, which added 19.5 gigawatts.
- There were 14 offshore wind projects in development off the U.S. East Coast and in the Great Lakes at the end of 2017, with more than 12.5 gigawatts of capacity.
To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net.
To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Will Wade, Mike Jeffers
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