CHARLESTON, W.Va. - New wind energy projects stalled when financing dried up during the Great Recession. Now new projects have hit turbulence because an important federal tax credit is set to expire.
Five projects were completed in West Virginia before troubles beset the industry. The projects have a combined capacity of 583 megawatts. Whether that is a lot or a little depends on your perspective.
The "it's a lot" school would boast that the projects are generating enough electricity to power 135,000 homes.
It's estimated the projects directly and indirectly support more than 100 jobs, pay almost $1.7 million annually to landowners, and pay about $850,000 annually in property taxes.
Jeff Herholdt, director of the state Division of Energy, said, "In some of our rural economies, these wind projects are the largest contributors to property taxes. These installations are worth tens of millions of dollars. When it comes to property taxes, they are significant taxpayers. This really stands out in our rural counties. Some rural counties don't have large employers or many businesses worth $50 million to $150 million."
West Virginia ranks 20th among the states in wind energy generation and fourth among states east of the Mississippi, according to the U.S. Department of Energy.
The "it's a little" school would point out that 583 megawatts is a fraction of the 10,394 megawatts installed in Texas, the nation's wind power generation leader.
It is estimated that wind power provides just 1.4 percent of West Virginia's electricity. In contrast, it provides more than 22 percent of South Dakota's power.
According to the American Wind Energy Association, an industry trade group, West Virginia still has a lot of potential. The association estimates West Virginia could generate 1,883 megawatts of power if the resource were fully developed.
"The key for expansion of the wind business has been retaining the 2.2 cents production tax credit," Herholdt said. "That's roughly equal to half of the wholesale cost of electricity. This is fundamental to them.
"With all of the concerns about the budget, there's no path forward for continuation of the credit," he said. "Some seem confident it will be extended. Some are not so sure."
It has been estimated that the credit costs about $1 billion a year.
The American Wind Energy Association cites a study by Navigant Consulting that estimates extending the credit for four years would result in 95,000 wind-related jobs and $16.3 billion in investment but a failure to extend it would cost more than 37,000 jobs and $10 billion in investment next year.
The credit is set to expire Dec. 31. For owners to claim it, their projects must be online by that date.
The credit has been an on-again, off-again thing. "There have been some years we didn't have it," Herholdt said. "That's when wind development fell off the cliff."