Let the wind production tax credit expire

Wesley Coopersmith Policy Analyst, Americans for Prosperity Foundation
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Americans deserve a national energy policy that is affordable, economically viable, and reliable. Wind energy is none of these, yet the federal government continues to offer increasing levels of support. The main federal tax break for wind energy is scheduled to expire in six weeks, and Congress should ensure that it does.

Established by the Energy Policy Act (EPAct) of 1992, the wind production tax credit (PTC) represents a generous handout for the wind energy industry. Initially, the wind industry received a tax credit of $15 per megawatt-hour of electricity generated. That number has risen to $23 today, due to increased government support. On the surface this may not sound like a lot in the larger context of the federal budget, but it adds up quickly. In 1998, wind subsidies cost taxpayers $5 million annually; by 2011, $1 billion annually. If extended, the tax credit will cost $12 billion next year alone.

Despite this generous support for over two decades, the wind industry has very little to show for it besides higher electricity prices and disappointing production results. Wind energy accounts for a disappointing 3 percent of electricity produced nationwide. Additionally, electricity rates have increased in many states due to mandates forcing electricity companies to include more wind energy sources in their power grids.

Supporters of wind energy argue that the industry just needs a couple more years of handouts to become economically viable; however, the history of the PTC casts doubt as to whether this supposedly infant industry will ever grow up. Throughout its existence, the wind tax credit has temporarily expired in 2000, 2002, and 2004. During these lapses, wind energy production decreased by 93 percent, 77 percent, and 73 percent, respectively. With the PTC on track to expire again in less than six weeks, wind power producers are already starting to scale back. Clearly, the survival of the wind industry is dependent upon government handouts.

Wind subsidy proponents argue that wind energy is reliable, but this goes against the very nature of wind. Unlike other sources of energy, wind heavily fluctuates throughout the day. As such, wind energy sources must be combined with conventional energy sources to match consumer demand by providing consistent electricity flow. In this manner, wind energy fails to accomplish its biggest goal – significantly reducing environmentally hazardous sources of energy.

Even the logistical transfer of wind energy is unreliable and expensive. One proposed solution to this problem would be the construction of a national electricity power grid for wind energy, but a project of this magnitude would cost at least $60 billion according to a 2008 New York Times estimate.

Ironically, wind energy is not nearly as environmentally friendly as its supporters would like us to believe.

Wind farms have caused unprecedented harm to bat and bird populations and their local ecosystems. An estimated 33,000 to 111,000 bats are predicted to be killed by wind turbines in the mid-Atlantic Highlands alone by 2020. According to The American Bird Conservancy, wind turbines kill between 75,000 and 275,000 birds per year including hundreds of bald eagles.

To top it off, Americans have to worry about the environmental cost of maintaining wind turbines. Often built in cold climates, wind turbines experience ice damage. To combat this problem, de-icing fluid, made up of two toxic chemicals known as propylene-glycol and ethylene-glycol, is placed on wind turbines. Runoff from this fluid is hazardous to the local fish and cattle population, and also contaminates the local food, soil, and groundwater.

At a time when Americans are struggling to find jobs and make ends meet, we cannot stand by and let special interest groups like those in the wind industry run Washington. Consumers, not the federal government, should decide what sources of energy should power their homes and businesses.

Wesley Coopersmith is a policy analyst at Americans for Prosperity