The PTC was one of dozens of lapsed business and individual tax breaks revived by the House bill. It now goes to the Senate for a vote, which looks increasingly likely to follow suit.
But it will do little to drive new project development, although it could provide a boost to some individual developers left in limbo when the incentive expired at the end of 2013.
David Burton, a partner at law firm Akin Gump, was cautious. "We very much expect the Senate to pass it, just because it is going to wreak havoc with the tax return filing season if it does not," he said. "It is sort of a lower-common-denominator thing — nobody loves it, but it's better than nothing."
The one-year extension would mean projects that start construction before the end of 2014 will qualify for the credit. But coming just weeks before the end of the year, it is widely perceived as too little, too late to move pipeline projects forward.
Make Consulting research manager Luke Lewandowsi believes it will be of limited value. "If the Senate goes along with the House on the one-year PTC extension, it offers very little opportunity for the wind industry. Only the very large players with projects in a late stage of development will be able to capitalise on the extension, and even this will be extremely limited," he said.
"A one-year extension all but erases any upside to 2016 and 2017, years already expected to be rather modest for growth."
There will be some developers who took a calculated risk there would be an extension and have been working to bring projects to the construction-ready stage in 2014, said Burton. "It looks like those people made the right bet. There are not a lot of them, but I think there are few who started new projects in 2014 and will now be able to get the PTC for them."
Other developers who had trouble meeting the requirements for qualifying for the PTC in 2013 could also benefit. Companies either had to spend 5% of total project costs or start actual physical work on the project, and some were unable to convince financiers they had done enough to guarantee they would get the credit, said Burton.
"If you are in that boat, you now have another chance to fix it."
The Internal Revenue Service also ruled this past summer that developers who did not quite make the 5% threshold could still get prorated PTC payments, as long they spent at least 3%. This now gives them a chance to qualify for the full full amount, said Burton.
It is difficult to say how many in the US wind sector fall into these categories, Burton admits. "I think it is more than a handful, but it is not going to be everybody."
Future remains uncertain
The fact that policymakers seem ready to agree only on a bare-minimum extension also casts doubt on the willingness or ability of Congress to revisit the PTC in 2015, said Lewandowski "This results in long-term doubt that will undoubtedly have severe consequences on the domestic supply chain."
House and Senate negotiators had been working on a broader deal that reportedly would not only have renewed most tax breaks provisions for two years and made others permanent, but also phase out the PTC through 2017. The deal fell apart after President Barack Obama threatened to veto it because of a lack of incentives for working families. Political leaders from Obama down have said they want to revisit the so-called tax extenders next year as part of a broader effort on tax reform, but Burton sees little chance of progress.
"It is just too complicated and too controversial, with too many winners and losers," he said. "I see next year playing out very much like this year, with every one running around late in the year trying to figure out what do with the extenders."
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