Wind turbine project developers are rushing to begin construction on projects before year's end, and thereby guarantee the projects are eligible for a tax credit (worth $0.023 per kWh) that expires on Jan. 1.
However, this isn't the first time construction has picked up ahead of a subsidy expiration. And since previous deadlines required projects to be completed (rather than just started) before a subsidy expired, the pressure on developers isn't quite as intense this time around.
Over the last two decades, Congress has allowed a wind tax credit to expire several times before later renewing it. Construction activity has generally fallen sharply following an expiration.
Wind turbine maker Vestas (VWDRY) has scored a slew of U.S. orders ahead of the deadline. The deadline also has implications for struggling turbine component/software maker American Superconductor (AMSC -1.3%).