The Truth About Wind Energy Subsidies: They Blow
By Jason Stverak
Recently Capitol Hill was inundated with wind energy advocates eager to make their case to extend the Production Tax Credit (PTC). At the same time, the Metro station near the Congressional offices was overtaken by the “wind week” ad campaign sponsored by the Sierra Club urging Congress to approve the tax credit extension. But, as America edges closer to the fiscal cliff and the debate over revenue increases and entitlement reform heats up, extending the PTC would not only make for poor policy, it would complicate our fiscal mess further.
Originally, the federal wind PTC was passed to jump-start the wind industry and provide wind energy producers with a subsidy of $22 per megawatt hour of electricity generated. Extended several times, the PTC is finally set to expire come December 31, saving taxpayers over $12 billion a year. Costly and ineffective, this tax credit has proved a failed attempt at promoting clean energy.
In addition to the direct cost to taxpayers, there is an outstanding obligation of approximately $10 billion for projects built during the past decade. Under the renewable energy bailout of 2011, there could be an additional $20 billion liability due to eligible wind projects—another burden taxpayers will bear.
According to Larry Bell, a Forbes contributor, in many parts of the country the PTC actually exceeds the wholesale price of power. If that isn’t troubling enough, the non-partisan Joint Committee on Taxation concluded that between 2009–2013 industry developers lost near $14 billion in revenue.
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