Tax Breaks & Subsidies
Finally, a breath of fresh air amid all the stale rhetoric over wind-energy tax credits: The CEO of one of the nation's largest wind-energy companies says Washington should hold the subsidies, thereby enabling the industry's innovation and competition.
It took an energy insider this past week to expose the dirty little truth about the future of wind energy - it's too costly, too unreliable and only getting more so because of government subsidies.
Take that, you green zealots.
If our communities can't reasonably afford to purchase and rely on the wind power we sell, it is difficult to make the moral case for our businesses, let alone an economic one. Yet as long as these subsidies and tax credits exist, clean-energy executives will likely spend most of their time pursuing advanced legal and accounting methods rather than investing in studies, innovation, new transmission technology and turbine development.
If only wind energy worked, it would be great. But it does not - at least not that well. What's worse, most people do not know, especially the Green Energy True Believers. Those who do know, however, do not care.
With Spain in the grips of recession, the government wants to lower consumers' light bills. In Germany, Chancellor Angela Merkel faces an election in September and hopes to win points with voters by putting a stop to rising electricity bills. The independent steps have been slammed by businesses as German and Spanish politicians move to finance cuts for consumers by passing on the costs to companies.
Grant Bosse, the editor of New Hampshire Watchdog, said the move by RGGI has little to do with lowering carbon emissions. He said the economic collapse and slow recovery meant fewer emissions, fewer producers purchasing permits, which meant a loss of projected revenue for the nine states. "This has everything to do with revenues and nothing to do with the environment. This is driven by a desire for more state revenue."
Instead of pouring money into subsidies and direct production support of existing, inefficient green energy, President Obama should focus on dramatically ramping up investments into the research and development of green energy.
Then there are the green-energy giveaways that are also quickly becoming entitlements. The wind production tax credit got another one-year reprieve, thanks to Mr. Obama and GOP Senators John Thune (South Dakota) and Chuck Grassley (Iowa). This freebie for the likes of the neediest at General Electric and Siemens.
The lesson of the Galloo tax deal should be clear in the minds of county legislators. It was an expensive concession that resulted in no benefit to the county, school and town governments. Jefferson County leaders should prepare themselves to tell all wind developers that they already have all the tax breaks they need to prosper and that the county will not add property tax relief to the parade of federal subsidies.
These subsidies, touted by their early sponsors 20 years ago as necessary to kick-start a green industry, do little to keep carbon dioxide, an earth-warming gas generated by combustion of fossil fuels, out of the atmosphere. And that little costs a lot - $12 billion if the subsidies are renewed for another year.
The wind lobby, fearing it could lose for a change, has suddenly changed its strategy and has sent Congress a letter, saying that it would be willing to accept a six-year phaseout of the production tax credit. But as Phil Gramm notes nearby, the wind subsidy was sold as temporary from the very beginning. Rest assured that once the six years are up, the industry will be back asking for another six.
Billions of dollars in subsidies will continue to be paid out over the next decade on existing projects even if the subsidies for projects built in the future expire. If unimpeded, the expanded use of cheap natural gas to generate electricity will raise living standards and attract millions of new industrial jobs. A vote to stop wind subsidies from being extended is, therefore, a vote for cheaper, more reliable power, higher living standards, reindustrialization and fiscal sanity.
Skeptics counter that Washington's wind subsidy and grant programs actually retard innovation and unlevel the playing field in the energy market. ..."The size of the subsidy relative to wholesale prices is distorting competitive wholesale energy markets and harming the financial integrity of other, more reliable generation."
While the three indirect and infrastructure [hidded] costs of wind have been acknowledged in research reports, they have not appeared in most generation-cost comparisons. That's because regulatory authorities have not required wind operators to pay for them, they've required consumers to pay for them instead. In an honest, transparent and accountable political system, that should not be an excuse for policymakers to ignore their impact on consumers, jobs and the economy.
At some point, Democrats need to give in on this "green jobs" pitch. Extending the subsidy is a jobs-killer. Government doesn't pick winners and losers well, yet the wind subsidy certainly picks a winner. In doing so, it also picks losers (and many more losers than winners) by transferring billions of dollars away from more-effective job producers.
America's debate on green energy is pathetic. In the past year, the two biggest green-energy issues in Congress have been whether to to strip the Environmental Protection Agency (EPA) of various authorities and whether to renew a crude subsidy for wind power.
This government in Washington, DC, is borrowing 42 cents out of every dollar we spend. That is why I come to the floor to point out a proposal that has been made to fleece the taxpayers out of an additional $50 billion over the next 6 years. This is a proposal that is as brazen as a mid-day bank robbery on Main Street. It is a proposal by the wind developers of America to say to the taxpayers: Please give us $50 billion or so more dollars over the next 6 years to phase out the Federal taxpayer subsidy for wind power.
In the history of American business, it's difficult to find an industry that has enjoyed more political favoritism than the wind-energy sector now enjoys.
The wind industry gets subsidies, mandates, and a de facto exemption from prosecution under some of America's oldest wildlife laws. And the wind-energy lobby is doing all it can to make sure that this favoritism is maintained.
Energy Policy: Wind and sunlight are free, but that doesn't make them cheap. This is a lesson that states such as California will learn as they push hard to cut the fossil-fuel share of electric power.
It's the taxes you can't see that may gouge you the most.
Solar and wind power advocates are fighting to renew clean energy subsidies, which expires at year's end. They argue that these technologies are worth the investment because they offset fossil fuel dependence and carbon emissions. Indeed, that's the conventional assumption of most energy researchers, government labs, and think tanks. However, there is an emerging problem with that assumption - there's no evidence to back it up.