A production tax credit (PTC) that lasts six years? That’s what Pennsylvania Congressman Mike Fitzpatrick proposed to Congress in late summer with his Production Tax Credit Certainty and Phase-Out Act of 2013. Six years gives the wind industry time to more fully develop so a PTC-phase out would not stunt growth, as has been the case in the past. The six-year period would also strengthen the market, allowing wind to compete with other energy sources. One-year extensions have weakened the wind industry because it generates too much uncertainty.
About 60 U.S. Representatives also want to weigh in on the subject and so signed a letter to the House Committee on Ways and Means to promote renewable energy tax reform. The letter highlights that renewable energy investments have increased worldwide, but declined 34% in the U.S. due to policy uncertainty. This investment inconsistency in American-made energy not only negatively affects the economy, but American consumers as well.
The wind industry has received fewer incentives than other energy sources, such as fossil fuels, which enjoy permanent tax credits. These credits can make an energy source profitable to investors because of the high likelihood the industry will be stable.
The PTC has been the wind industry’s primary incentive, and an effective one. In 2012, for instance, it sparked over $25 billion in private investment that set a new installation record. Sadly, the industry saw no growth in the first half of 2013 due to the delayed PTC renewal. The wind industry doesn’t need life-long incentives to be sustainable. It just needs the same support fossils fuels and nuclear have received…for a more limited period.
So, what is the likelihood of passing the Production Tax Credit Certainty and Phase-Out Act of 2013? I’m not sure with so much opposition to renewable and sustainable energy sources. But what I do know is that the wind industry supports about 80,000 jobs in the U.S. and is less polluting than most traditional energies. What’s more, wind is becoming increasingly affordable, making it a good buy for electric utilities. And we all reap its benefits. Also, improvements throughout the industry provide increased turbine reliability, which further alleviates price fluctuations that have occurred in other energy sources, such as natural gas.
Keeping an archaic energy mentality and not embracing inevitable change is hurting our economy. Wind energy is a well-tested, sustainable energy source throughout the world. Overall, I believe wind energy will find a way to grow and thrive with or with out a PTC, but a little incentive never hurt.
Nic Sharpley
Windpower Engineering & Development
Filed Under: Featured, Policy
Whoops! I didn’t see my first post after I logged on. Please delete the one from today. Sorry for the redundancy.
Why give more taxpayer money to wind developers when there are less frivolous investments, like helping Ford bring back the Edsel, or fund a study to investigate whether Truman stole the election from Dewey!!
Another six years of investment in the collapsing wind industry? Rather than waste tax-payer money so frivolously, why not fund a study for Ford to bring back the Edsel? And an investigation to see if Truman actually stole the election from Dewey! Gimme a break!
The BAUCUS proposal to eliminate both the ITC and the PTC could be the breakthrough compromise we are looking for. It is time for the PTC’s favoritism to Wind to expire. http://www.renewableenergyworld.com/rea/news/article/2013/12/us-proposes-energy-tax-reform-heres-what-it-means-for-renewables?cmpid=SolarNL-Thursday-December19-2013
Given the sad financial condition of the U.S.A., with its massive deficits and expensive borrowing, we have to scrutinize every expenditure proposed. Particularly those with strong politically-based backing and lengthy commitments. That describes the Wind PTC perfectly.
Mr. Stacy is correct. The problem with wind is not in the numbers. It’s in the resource itself. Indisputably, no amount of taxpayer charity is going to make wind predictable and constant. No amount of corporate welfare will make wind-generated energy dispatchable. No amount of handouts will ever place grid-scale wind projects near the population centers that use the electricity. Now now, not ever.
Enough about ‘leveling the playing field so wind can compete’. The wind industry has grown into a spoiled teenager who continues to depend on us, its parents. A dose of tough love is long overdue. Go out there and stand on your own two feet… the gravy train is over! Sure, there will be some pain in the short run (job losses & plant closings) but ending the PTC would be the best medicine for America over the long run.
Paul Gaynor, CEO of First Wind, has said repeatedly that the industry is now able to make it without the PTC and that the PTC is actually hurting wind developers. Who should know better? Why don’t we take him at his word even though he continues to suck every subsidy and grant he can get his hands on?
Mr. Stacy is correct…my thanks to him for speaking out.
The more one peels back the layers of this wind energy scheme, the more one sees its inherent idiocy. It’s taken indoctrination of the public and collusion and corruption within the corporate-controlled government to take ‘wind’ this far.
It’s time for this scam to come to an end. Americans need to do their homework, find their voices, and stand up and say “NO!” to the PTC and the mandates that are driving this high-impact, low-benefit energy plan.
Kaz Pease
Lexington Twp., Maine
“America needs wind energy like a prom queen needs acne.” So it is said by wind energy and electricity system independent analyst, Jon Boone. An argument for the wind PTC “because it helps make wind price competitive” leads one to believe cost/price is the issue. Clever misdirection, AWEA, but cost/price most definitely isn’t the issue. Wind energy’s problems are a permanent unchangeable lack of fuel supply controllability and that fuel supply stream’s inverse relationship to daily and seasonal swings in electricity demand. A good analogy is this: 1,000 feet of fishing line produced in individual six inch strips could be subsidized to make its price lower than the price of a continuous 1,000 ft. spool of the stuff, but could you fish with it? Of course not. And so states now mandate the purchase of wind electricity because subsidy alone wasn’t enough to turn a technical and environmental loser into a thriving business model. Those who know this, but still look for ways to access a never ending supply of hard earned American tax dollars that instead could work toward reducing the national debt (you know, our addiction to borrowing money from countries who hate us?) should, in my opinion, be tried and found guilty of treason. A red scare might be just what America needs to shock some sense back into her, pardon the pun.