While millions of Americans continue to struggle in the down economy, the federal government continues to send billions of their tax dollars to special interests the wind industry. The main federal handout for wind energy, the production tax credit (PTC), costs $12 billion each year. A new study from the Institute for Energy Research breaks down the impact of this tax break on North Carolina taxpayers. Given its high cost, our lawmakers should oppose extending the wind PTC and similar incentives for wind energy at the federal and state level.
The researchers calculated the impact of the wind PTC on North Carolina using data from the IRS and the U.S. Energy Information Administration. As it turns out, our state taxpayers faced a tax burden of $69 million this past year because of this tax break; meanwhile, our state had no wind production and collected zero subsidies. We shoulder the cost, but we don’t see any benefit.
The authors of the IER study also note that this $69 million impact is just a snapshot of one year. The PTC has existed for 20 years, and it has a significant cumulative impact. We’re talking about a lot of money that would otherwise stay in the pockets of North Carolina taxpayers – money that they could otherwise save, spend, and invest as they choose.
Even though North Carolina is unfit for wind power due to geography, our state government has a number of programs that are aimed at developing this technology, over and above the federal incentives. We have state-specific tax incentives for wind energy and other renewables. Thankfully, due to the recently passed state tax reforms, these tax incentives – or tax loopholes – will expire by 2016.
More ominous than the tax loopholes is the state’s Renewable Energy Portfolio Standard (REPS). The REPS is a green energy purchase mandate that requires utilities to buy certain amounts of their electricity from wind power and other renewable energy sources. Our state’s renewable portfolio standard requires investor-owned utilities to procure 12.5 percent of their electricity from green sources by 2021; it requires electric cooperatives and municipal utilities to have 10 percent by 2018. Unfortunately, unlike the tax loopholes, the REPS is still in place.
Keep in mind that there two wind turbine sites in Alamance County alone.
It’s time for our elected officials in Washington and Raleigh to oppose extending tax breaks and purchasing mandates to wind energy. They should to overlook the wishful thinking on wind energy and take a close look at the facts. The overlapping incentives for wind power consistently fail to bring the long-term job creation, economic activity, and energy affordability that special interests in the wind industry promise.
North Carolinians deserve energy solutions that can make it on their own in the marketplace, not ones that have to be propped up by government forever like wind energy. Over 182,000 Americans for Prosperity activists live here in the Tar Heel State, our lawmakers should know that we are watching their actions on this issue. Sending millions of our tax dollars to special interests in the wind energy industry is not why we elected them.
Donald Bryson is the North Carolina Policy Specialist for Americans for Prosperity, a non-profit conservative advocacy group. Visit the website at www.afpnc.org.
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