Implications of the Production Tax Credit on the Tax Liability for Companies in the Wind Energy Sector of the Energy Industry: An Exploratory Study

Abstract

Since 1998, an interest in wind power has emerged. The United States’ strategic energy plan is to reduce dependence on fossil fuels and supplement and/or replace them with renewable sources of power. To promote wind power, generous economic subsidies such as the production tax credit are offered by the federal government to companies willing to make the required capital expenditures. Several subsidies are in the form of tax credits which reduce the income tax liability of the owners/operators of the wind farms. This research study explores the impact of the production tax credit (PTC) on companies’ tax liabilities