Is the wind lobby’s most precious subsidy finally losing steam in Congress?
posted at 8:41 pm on April 16, 2014 by Erika Johnsen
Via the WFB, we can only hope. The egregiously generous wind production tax credit (which provides a guaranteed 2.3 cents per kilowatt-hour of energy during the first ten years of a project’s operation, by the way) has been through fits and starts of expiration in Congress only to be followed by belated renewal over the past two decades — and funnily enough, the construction of wind projects has correlated rather conspicuously with the credit’s fortunes. What might we suppose that suggests about the nature of this heavily subsidized and politically prized form of renewable energy? That is has yet to achieve the type of cost effectiveness that would allow it to successfully compete in the free market based on its on merits and that is has been living a lie courtesy of the taxpayer, perhaps?
Expired federal tax credits for the wind industry are in front of Congress again, but the political future for the long-standing subsidies is anything but safe, according to a new report.
Experts at Capital Alpha Partners, one of a burgeoning group of research firms that provides political intelligence for investors, wrote last week that the appetite on Capitol Hill for continuing the wind energy production tax credit (PTC) is declining.
In a report obtained by the Washington Free Beacon, Capital Alpha writes that a combination of flagging political will and changing market environments could signal the decline, and possibly the end, of the two-decades-old tax credit for the wind industry.
“There comes a time when subsidies which are popular to start with become less popular as conditions change,” the report says. “The wind PTC may be reaching that point—not just because some in Congress are losing patience with the so-called tax extenders, but also because fundamental market conditions are putting the traditional utility model under stress.”
Unfortunately, I wouldn’t count on Congress not finally succumbing to the wind lobby and tacking an extension onto some bill or other under the radar, and even if they don’t — the wind production tax credit might be the single most significant subsidy for wind, but it certainly isn’t the only one. There are investment credits, loan guarantees, renewable quotas, state subsidies, etcetera etcetera for the taking, and I have little doubt that ‘environmentalist’ investors will shortly find a way to lobby/make up for their lost income somehow. Ugh.