In 2020, the United States government reported a staggering 68% increase in wind energy production from the previous year, with wind power generating enough electricity to power over 29 million homes. But what’s driving this explosive growth? The answer lies in the rapidly evolving landscape of wind energy incentives.
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As governments around the world scramble to meet climate goals and reduce carbon emissions, wind energy has emerged as a leading player in the clean energy revolution. And at the heart of this growth are the incentives that governments offer to encourage the development and deployment of wind energy projects.
From tax credits to grants, and from net metering laws to green bonds, wind energy incentives come in many shapes and sizes. But what’s surprising is just how effective they’ve been in driving growth. In the United States, for example, the Production Tax Credit (PTC) has been instrumental in making wind energy a cost-effective option for utility companies and landowners alike.
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The PTC, which was established in 1992, provides a tax credit of $0.022 per kilowatt-hour of electricity generated by a wind turbine. While the credit has been subject to congressional extensions and phase-outs, it’s been a game-changer for the industry. Between 2008 and 2016, the PTC helped drive a 1,300% increase in wind energy production in the United States, according to the American Wind Energy Association.
But wind energy incentives aren’t limited to tax credits. In many countries, governments offer grants and subsidies to support the development of wind energy projects. In Denmark, for example, the government offers a guarantee of 100% of the project’s revenue to investors in wind energy projects, effectively eliminating the financial risk associated with investing in renewable energy.
And then there’s the rapidly growing trend of corporate renewable energy procurement. Companies like Google, Microsoft, and Amazon have all committed to powering their operations with 100% renewable energy, with wind power being a key component of these efforts. In fact, a report by BloombergNEF found that corporate renewable energy procurement accounted for over 70% of all new renewable energy capacity added in 2020.
So what does this mean for the future of wind energy? As governments and corporations continue to invest in wind energy incentives, we can expect to see even more growth and innovation in the industry. From floating wind turbines to community wind projects, the possibilities are endless.
As we look to the future, one thing is clear: wind energy incentives are playing a critical role in driving growth and innovation in the industry. And as the world continues to transition to a low-carbon economy, it’s likely that wind energy will remain at the forefront of the clean energy revolution.
Sources:
* American Wind Energy Association. (2020). AWEA 2020 Year in Review.
* BloombergNEF. (2020). Corporate Renewable Energy Procurement 2020.
* US Department of Energy. (2020). Renewable Energy Data Book 2020.
