Tax Subsidies
“In the 1980s wind power was dubbed an “infant industry” that needed federal help to grow. More than three decades and tens of billions of dollars in subsidies later, the business of making electricity from spinning turbines remains inefficient and heavily dependent on federal aid—i.e., the American taxpayer.”
The Wall Street Journal refers to the industrial wind turbine industry as the “wind racket”. This is because since 1992 the wind industry has lived off a “production tax credit” that begins with construction of a turbine and lasts 10 years.
The Production tax-credit takes “billions out of the pockets of working Americans and transfers the money to rich investors. That is not half of it. Wind payments made to wind companies through power-purchase agreements (PPAs) with utilities (i.e., rate payers) add even more to a rich investor’s portfolio and can extend for 20 years or longer.
As Warren Buffett explained in 2014, we “get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
From (“Big Wind and Tax Reform, https://www.wsj.com/articles/big-wind-and-tax-reform-1510358458?mod=article_inline )
(The Hidden Costs of Wind-Power Subsidies, https://www.wsj.com/articles/the-hidden-costs-of-wind-power-subsidies-1511291003)
“The primary federal subsidy for wind is a tax credit known as the production tax credit, or PTC, which offers wind facilities and some other renewables a small tax credit for every kilowatt hour of energy produced over a farm’s first decade.
According to the Joint Committee on Taxation, U.S. support of wind through the PTC has amounted to at least $1 billion every fiscal year since 2010, including estimates of $4.5 billion in 2018 and $4.7 billion in 2019, or a total of just under $25 billion since 2010.
The credit, however, is already being phased out. After being worth a maximum of 2.3 cents per kWh for farms that broke ground in 2016, the credit value has fallen by 20 percentage points each year, and the PTC is scheduled to elapse entirely at the beginning of 2020. This year is the last year in which wind operators can begin building a new wind farm and receive a tax credit going forward.
There are other federal subsidies that go to wind power, including about $24 million for research and development in 2016, per the Energy Information Administration. But as a University of Texas at Austin Energy Institute analysis found, the vast majority of federal investment in wind stems from the PTC.
Outside of federal subsidies, wind benefits from a bevy of state policies and incentives, most notably through renewable portfolio standards, which require a certain amount of electricity to be generated by renewable sources.
While the standards are not subsidies in the traditional sense, multiple experts said they function like subsidies and have driven wind development in areas where it otherwise would not have happened. As the tax credit goes away, these standards are likely to play an even bigger role.
The financial impacts of these policies, however, are difficult to tabulate, and most analyses that provide estimates of wind energy costs with a breakdown without subsidies are only concerned with the financial assistance coming from the PTC.”
Quoted text from https://www.factcheck.org/2019/07/does-wind-work-without-subsidies