Extend Production Tax Credit to encourage renewable energy
Barack Obama
"Will . . . extend the federal Production Tax Credit (PTC) for 5 years to encourage the production of renewable energy."
Extension through 2020 passed with bipartisan support in 2015
With some bipartisan help from Congress, President Barack Obama was able to keep his promise to extend an existing tax credit for wind energy in December 2015.
Congress, with the support of the wind energy industry, passed an omnibus spending bill that included language to extend the tax credit for wind energy for five years, as well as a separate tax credit more commonly used for solar energy. The credit was also made retroactive for the entire 2015 calendar year.
However, the amount of the tax credit was set on a path to shrink each year until it is disappears after 2020. (Here is a detailed analysis of the provisions written by the law firm Baker Botts.)
The wind power provision was paired with one that was less popular with environmentalists -- one that expanded the United States' ability to export oil.
"This one was a team effort on both sides of the aisle," said Peter L. Kelley, vice president for public affairs for the American Wind Energy Association.
As things stand, the tax credit is poised to outlast the Obama administration by four years. We rate this a Promise Kept.
Congress extended the credit, but not for as long as Obama promised
On the campaign trail, Barack Obama promised to boost the renewable energy industry.
One quick fix: extending the Production Tax Credit for the production of biofuels, wind and solar energy.
As part of the stimulus bill, producers are now eligible for a 2.1-cent per kilowatt-hour benefit. Other technologies, such as some types of hydropower, will get 1 cent per kilowatt-hour.
The bill extended the program for wind production from 2009 until the end of 2012. The tax credit for geothermal, hydropower and other renewable energy will be available 2009 until the end of 2013.
According to Rob Gramlich, senior vice president for the American Wind Energy Association, the three-year extension was a boon to the industry.
"It was a longer extension than we have ever had and the administration worked very hard to restructure the mechanism to work in the changed economic environment," he said. "So we give the administration very high marks on the tax credit."
That said, Obama is still three years short of his promise for the wind tax credit. And for other renewables, he's two years shy of meeting his goal. As a result, we're giving Obama a Compromise on this pledge.