Dive Brief:
- Development begun on Texas wind generation worth billions of dollars has stalled while issues related to construction start dates under the production tax credit are sorted out.
- Dallas Business Journal reports that Tri Global Energy has more than 1,200 MW currently under development in Texas, but has halted work while waiting for clarification.
- The production tax credit was extended in mid December for a brief time, allowing construction to begin by the end of the year on projects which would qualify for the subsidies.
Dive Insight:
Tri Global CEO John Billingsley Jr. told the Dallas Business Journal that his company has nine projects amounting to $2 billion in wind generation under development but currently on hold in Texas, as the industry waits for clarification on the wind production tax credit from the Internal Revenue Service.
When the wind production tax credit was extended briefly at the end of 2014 it allowed for projects which began construction last year to qualify for the credit. But now developers have halted construction as they wait for clarification on what constitutes the beginning on construction.
"The whole industry is waiting on that and hopefully it's coming," Billingsley told the Dallas Business Journal. A deal to extend the tax credit through 2015 failed during a Congressional debate over broader business tax breaks last year.
While it remains unclear what formally marks the beginning of construction. Chadbourne Partner Keith Martin, who specializes in tax and project finance law, told Utility Dive in December that one way is to incur at least 5% of the final project cost, while another involves beginning significant physical work.