US Wind Energy
Wind energy is now one of the most prominent sources of renewable energy. In 2010, wind power consisted of 2.3% of the electricity generated in the US, and this proportion increased to 7.29% in 2019. Despite this sharp increase in supply and demand, the wind energy market has not matured enough and will require more aggressive government funding to push wind energy into the mainstream US energy market, especially this year in 2020.
Average Wind Speeds in the US, related to potential wind energy generation capacity.
Actual installed wind energy capacity in the US, as of the end of 2018.
Current Government Funding Incentives via Tax Credits
In the past few decades, tax credits have supported the adoption of wind power technology by cost reductions and subsidies. There are two main types of tax credits that has driven the wind energy industry:
- Investment Tax Credit – The Investment Tax Credit provides cost reductions for the installation of wind turbines. Since the incentives are based on facility installation rather than performance, low production and reliability reduced the incentive’s favorability, and ITCs eventually expired in 1986 without renewals.
- Production Tax Credit – The Production Tax Credit provides cost reductions based on the performance of wind energy facilities. The PTC rose up in as a part of the Energy Policy Act of 1992, after ITC fell out of favor. This change in funding forced wind turbines to focus on reliability and efficiency, incentivizing technological advancements. One criticism of production tax credit is that the incentives make wind power cheaper for utilities and consumers, but it comes at the expense of taxpayers. The PTC has undergone multiple phases of expiration and extension from 1992 to today. The latest grant was a 5-year PTC in 2015, and is looking to phase out this year in 2020.
Importance of Continuing Government Funding in 2020
As wind energy sector’s latest (and possibly final) 5-year Policy Tax Credit starts to phase out, the future of US policies surrounding wind energy’s economic incentives remains uncertain. Despite the Production Tax Credit’s success in spurring over $143 billion private investment and 140,000+ jobs in the wind energy sector, past trends and current situations suggest that continued government financial support will be critical in 2020.
In the past, the wind energy industry’s research and development efforts have relied heavily on Production Tax Credits, with annual wind capacities corresponding closely to the elapse and expiration of the policy. If the PTC isn’t renewed this year, the sector can expect to have a significant decrease in wind power outputted.
Annual wind capacities correspond with the elapse and expiration of the PTC.
Unfortunately, US’s current economic scene also poses a major threat for the sector’s smooth entrance into the financial independence in the market. With the coronavirus pandemic pushing the country into a likely recession, the wind industry is a) pressing lawmakers to extend the 2020 PTC deadline as the economic disruptions can cause significant delays to energy projects and b) asking the administration to include renewable energy in its $1 trillion (specific value still under debate) economic stimulus plan as sectors with less cash-flow are hit hardest by current situations. As 2020 heads towards an uncertain direction for the US, the renewable wind energy sector will fight for its spot in the government’s continued economic support, as receiving federal financial support in 2020 will be crucial for the sector’s long-term success.
 “Electric Power Monthly” (PDF). Report. U.S. Department of Energy, Energy Information Administration. March 4, 2015.
 Gray, Tom (September 2004). “State of the Wind Energy Industry in 2004”. American Wind Energy Association. 17 April 2011.
 Simmons, Randy; Yonk, Ryan; Hansen, Megan (July 2015), The True Cost of Energy: Wind (PDF). Utah State University. July 7, 2015
 “Tax Policy”. American Wind Energy Association. No Date.
 St. John, Jeff; “Solar, Wind and Storage Industries Seek Relief in Coronavirus Stimulus Package”. Green Tech Media. March 19, 2020