CHICAGO (November 9, 2015) - Today, 46 renewable energy companies and business advocacy organizations urged U.S. Senator Mark Kirk and Representatives Bob Dold and Pete Roskam to support timely extensions of the Production Tax Credit (PTC) and Investment Tax Credit (ITC) in a letter to their offices. The renewable power industries have invested $7.2 billion in the state since 2003, and extensions of the PTC and ITC, the two primary federal incentives for renewable power development, are expected to come up for a vote later this fall.
Despite great success in helping spur low-cost wind power development, the PTC was allowed to expire at the end of 2014. Similarly, the ITC is set to drop from a 30 percent credit to 10 percent for commercial installations at the end of 2016, and the residential credit will fall to zero - unless Congress acts.
"[We] are interested in doing business in Illinois, but are stymied by the ongoing policy uncertainty around clean energy tax policy," states the letter. "Like all businesses, the renewable power sector needs stable, predictable federal tax policy to create jobs, invest capital, and deploy clean energy technologies."
The ITC and PTC have helped produce more than 6,000 Illinois jobs in wind, solar, and other renewable power sectors. Rural farmers and landowners have also benefited from these policies, receiving $13 million a year in land lease payments, while local governments take in over $28 million in tax revenue from wind farms, according to a study from Illinois State University. These revenues help schools already hit hard by late or declining state payments.
The Chicago area is home to more wind power companies' headquarters than any other city in the country. Illinois ranks #5 in the nation for installed wind generation.
"The repeated, short-term extensions of the PTC perpetuate the uncertainty that has both slowed the wind industry's growth and not allowed the realization of the cost advantage that a stable environment would allow," said Tom Carlson of wind and solar developer EDF Renewable Energy and a signer of the letter. "Every business needs long-term policy certainty, and extending the PTC and ITC would greatly help this industry to plan and make investment decisions."
Industry innovations continue to drive down the cost of renewable power, with wind energy costs declining 66 percent in the last six years, and the cost of solar installations falling 53 percent since 2010. These renewable energy sources reduced power prices by $177 million in one year, as the state already has enough wind power capacity to supply one million homes.
"Our customers are putting solar on their roofs because they save money in the long run," said Brandon Leavitt, President of Solar Service, a Niles-based installer and a signer of the letter. "An extension of the ITC will give our customers greater clarity about their investments and help us keep our installers working across Illinois."
The renewable power sector has historically received far less federal government support than traditional fuels. According to a DBL Investors study, the oil and gasindustries received five times more federal support than renewables during the first 15 years of each set of incentives.
With the new federal rules on carbon dioxide pollution - known as the Clean Power Plan - finalized earlier this year, Illinois expects to increasingly look to renewable power to meet its electricity needs. Stable clean energy tax policy will encourage the new renewable power development needed to meet the rules, and also assist in keeping down consumer costs.