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In his State of the Union (SOTU) address, President Barack Obama reiterated his support for renewable energy. But what he didn't say was even more interesting.

A policy framework released by the White House in conjunction with the SOTU address highlights the specifics that were conspicuously absent from the president's speech. Among them is a proposal to make the renewable energy production tax credit (PTC) a permanent fixture of the tax code.

The measure is cited as a step toward meeting another goal contained in the policy framework but missing from the SOTU speech: the president’s goal to double renewable energy production by 2020.

"To once again double generation from wind, solar and geothermal sources by 2020, the president has called on Congress to make the renewable energy production tax credit permanent and refundable, as part of comprehensive corporate tax reform, providing incentives and certainty for investments in new clean energy," the document states.

This isn’t the first time Obama has proposed such an idea. Last February, the president called for a permanent PTC as part of his plan for business tax reform.

However, the American Wind Energy Association (AWEA) has stressed repeatedly that despite the industry’s obvious preference for a PTC in the near term, the incentive was never intended to be permanent. Last December, AWEA said six years would be enough time to ramp down the PTC.

Under the six-year-phase-out scenario, the PTC would begin at the current $0.022/kWh and be phased down by 10% annually, to 90% of that value for projects placed in service in 2014, 80% in 2015, 70% in 2016, and 60% in both 2017 and 2018, at which point it would end.

According to AWEA spokesperson Ellen Carey, the association would be willing to discuss a phase-out as part of a broader discussion about the PTC.

“We would be happy to engage in further discussions, if and when Congress seriously engages in comprehensive, bipartisan tax reform where other industries are at the table as well,” she tells NAW.

In the immediate term, however, AWEA is concentrating on continuing the momentum resulting from the recently passed one-year PTC extension.

“Right now, we are thankful that Congress extended the PTC for a year,” Carey says, “and we need to focus on building more wind projects, maintaining our manufacturing sector and regaining the industry’s momentum that was put on hold during the last year.”


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