Wind industry groupies have been forming betting pools on when guidance providing details on the production tax credit (PTC) sunset would be published by the government. (The PTC sunset requires wind projects to start construction in 2013 to be PTC eligible.) The over/under was a publication date of July 1, 2013. Many worried that July would be too late for the majority of wind developers to meet the requirement in 2013. However, an American Wind Energy Association (AWEA) official has predicted guidance in one to two months.
That time frame would be fantastic news for the wind industry and the American economy. Unfortunately, that time frame sounds like the IRS moving at light speed: it can take longer than that for the IRS to write a private letter ruling about whether crop fertilizer is to be capitalized or expensed. One can only hope that the AWEA prediction is based on conversations with government officials and is not merely wishful thinking.
In addition to receiving the guidance soon, the wind industry hopes that the guidance defines “start of construction” as spending 5 percent of the cost as was the case for the Treasury cash grant program. And further, that the 5 percent does not have to be tracked on a turbine-by -turbine basis; such a record keeping exercise would make developers spend their precious capital on accountants, rather than on putting steel in the ground.