It’s wasteful to keep offering production tax credits to a “mature technology” like wind energy in the United States, a Tennessee Republican said.
U.S. Sen. Lamar Alexander, R-Tenn., spoke on the floor in support of ending a wind production tax credit by the end of the year as part of a broader tax overhaul under consideration in the nation’s capital.
“We have turned our attention to tax reform and our principle challenge is to find tax breaks and loopholes to eliminate so that we can lower rates for taxpayers,” he said. “And I think that at the top of the list should be ending the wasteful and expensive subsidy for a clearly mature technology this year.”
Last month, New York Lt. Gov. Kathy Hochul said “unprecedented investments” were laying the groundwork for her state to become a new hub for the offshore wind energy industry.
As of 2014, the state had 20 wind energy projects in service, with a total capacity of 1.8 gigawatts of capacity. The state set of a goal of 2.4 GW by 2030. There are more than a dozen offshore wind energy projects in various stages of development in the United States, representing more than 9.1 GW of installed capacity.
One GW is enough to power 100 million LED light bulbs.
Tennessee is a national leader when it comes to hydroelectric generating capacity, with more than two dozen dams in place. A wind farm started operating in 2000 with 2 megawatts of capacity, but has since expanded to 29 megawatts. There are four solar farms in the state with a combined capacity of 56 megawatts.
Most of its electricity, however, comes from coal.
Alexander said phasing out the tax credit isn’t enough, pointing to research he said estimated its cost at more than $23 billion in the four years ending in 2020.
“Despite the billions Congress has provided in subsidies, wind energy still only produces 6 percent of our country’s electricity and 17 percent of our country’s carbon-free electricity,” he said.
A handful of sections of the broad-based tax bill extend into the energy sector. While some considerations were offered for solar and small-wind energy projects, a tax break for electric vehicles would expire for those vehicles placed into service at the beginning of the 2018 tax year, if the measure passes.
The measure aimed at tax breaks for electric vehicles was introduced by U.S. Rep. Kevin Brady, R-Texas, the chairman of the House Ways and Means Committee. Texas, the No. 1 oil producer in the United States, also has the most installed wind power capacity on the grid.
A quarterly report from the American Wind Energy Association found the sector is gaining traction. Compared with last year, there were 40 percent more wind energy projects under construction or advancing through the development stage during the second quarter.
Tom Kiernan, the CEO of the wind energy trade group, told UPI the industry is way ahead of Alexander with a bipartisan effort to phase out the tax credit.
“This is in stark contrast to nuclear industry subsidies that have been in place for over 60 years that the senator continues to support,” he said. “Sen. Alexander should join his colleagues in maintaining the phase out that is enabling job growth nine times faster than the average industry and is expected to foster tens of thousands more jobs and $85 billion in economic activity.”
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