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Retire Costly Wind Subsidy–Federal Production Tax Credit

February 11, 2012

Massachusetts citizens who helped stop reauthorization of the section 1603 ARRA funding in December can help to stop renewal of the Production Tax Credit now.

Sign on to send your representatives and senators a message by emailing Lisa Linowes at The highlights are:

We urge you to vote NO on any further extensions of the Production Tax Credit (‘PTC’) for wind energy for these reasons:

High Cost: In many regions of the country the PTC now equals, or is greater than, the wholesale price of power. Since adopted in 1992, the cost of the PTC for wind energy has ballooned from $5 million a year in 1998 to over $1 billion annually today. This open-ended subsidy of 2.2¢/kWh in after-tax income represents a pre-tax value of approximately 3.7¢/kWh.

Even if the PTC were to sunset, taxpayers are still obligated to cover nearly $10 billion in tax credits for wind projects built in the last decade. This is in addition to the nearly $20 billion debt for wind projects eligible under Section 1603.

Job losses: Despite billions in public funding since 2008, the wind sector has reported a net loss of 10,000 direct and indirect jobs bringing the total to 75,000 jobs. It takes only 0.1 jobs per megawatt to operate a wind plant. Most of the sector’s jobs are temporary construction positions.

Inefficient: Since the PTC is uniform across the country it is highly inefficient, supporting poorly sited wind development in some areas while in other areas supporting projects that would have been built regardless of the credit. This is true in Texas and the Pacific Northwest where wind generation exceeds transmission capacity. In New England the PTC overpays investors since utilities routinely sign long-term contracts for wind at prices significantly above market.

Wind sector slow-down not tied to the PTC: The wind industry insists it’s at risk of a slow-down without the PTC and jobs will be lost. But this view ignores crucial factors driving development in the U.S. Demand for wind has eroded, in part, due to states meeting their renewable mandates. Lower natural gas prices have further reduced wind’s attractiveness as a ‘fuel saver’. Faced with these market conditions, wind developers are tabling projects. The EIA now forecasts flat growth in the wind sector for this decade regardless of what happens with the PTC.

The PTC is nothing more than an earmark that lines the pockets of project owners and tax-advantaged investors while skewing the energy market and artificially masking the real cost of wind power. It’s time for the production tax credit to expire.

Send this message yourself or give your name and address, your permission, and indicate who your representative is; Lisa Linowes will add your name to the others from Massachusetts who want to end this costly earmark.

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