Ed Zaelke Quoted in Windpower Monthly on Production Tax Credit Phase-out
Akin Gump global project finance partner Ed Zaelke has been quoted in the Windpower Monthly article “Longevity of PTC phase-out could herald lower cost of energy” regarding the five-year phase-out of the wind production tax credit (PTC) that Congress approved in December. Along with the investment tax credit for solar energy, the PTC will see a five-year period during which the tax benefit it offers is gradually reduced.
Discussing how those in the wind industry feel about the legislation, Zaelke, speaking at Akin Gump’s recent semi-annual energy briefing, said, “The industry kept saying if you give us a long-term extension of the PTC we can actually invest R&D dollars and further reduce the cost of producing energy from wind. They got what they wanted.”
Zaelke noted, however, “It’s not perfect, because the credit reduces, but manufacturers now have a long-term path to make those investments. They believe that by 2019, they will have the cost of energy from wind equal to what it is today with the PTC factored in.”
Utilities will likely be looking to take advantage of wind-energy subsidies while they are still available, Zaelke added, particularly with coal retirements looming. “The old rule,” he said, “about get-to-the-getting-while-the-getting-is-good applies here. If you're worried about your coal plants going away, and you want to lock in cheap power, you are going to do it in the next couple of years while federal government is paying a bigger share of it through the PTC. I expect we’re going to see a lot of new money coming into wind.”