Production tax credit

Production Tax Credit (PTC) for wind power producers. In addition, electric utilities are more and more likely to be required by local or national governments to use renewable, sources such as wind, for a significant portion of their total power generation. Consequently, many major utility firms and energy concerns have been investing significant amounts in new windmill farms. 

In many parts of the world, government support is available to finance wind turbine installations. In the United States, the production tax credit for wind-generated electricity is 1.9c/kWh. This, in 2006-2007, cost the treasury 2.75 billion. In California, for example, a 32,000 wind turbine (about 12 ft in diameter and 30-100 ft tall) is supported by a 16,000 state rebate. 

Grid-connected wind-generated electricity becomes cost competitive with coal and nuclear at wind capital costs of 850 and 1034 /kW, respectively (Figure A.ll). For comparison, the default DOE wind capital cost assumption is 1060 /kW. Figure All also illustrates the impact on wind economics of a 1.8 cent per kWh production tax credit (PTC). This PTC greatly improves the economic feasibility of wind systems. The wind capital cost at which coal technology becomes competitive... 

The Energy Policy Act of 1992 established a 1.5 cent per kWh production tax credit (PTC) for wind-powered electricity, adjusted annually for inflation. This amounts to 1.8 cents per kWh in 2005. 

Learning costs and risk bearing by the federal government As mentioned above, US federal support includes a production tax credit (PTC) of... 

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