This Opinion Column was written for and published by the Burlington, North Carolina, Times-News on January 24, 2014. The full article is available here.
Wind energy is good for North Carolina, and the country… In 2012, wind energy was the most-installed source of new power generation in the country, and for good reason. Wind energy prices continue to plummet and wind farms are frequently lower-priced than coal-fired power plants, nuclear reactors and in some cases natural gas power plants. Wind energy is also wildly popular — two independent polls taken in 2013 by Gallup and Navigant confirm that over 70 percent of Americans support this clean, domestic source of renewable energy.
To support this American-made industry and many other sources of energy, President George H.W. Bush passed the Production Tax Credit in the early 1990s. Every president since then has renewed this tax credit in order to reduce the overall tax burden on the relatively new wind industry, highlighting its wide bipartisan support. The Production Tax Credit for wind energy has historically been renewed on somewhat of an annual basis; but because of the dysfunction of the current Congress, the tax credit has recently lapsed.
North Carolina is home to over 23 manufacturing facilities that support the domestic and international wind energy industry, including Armacell, AKG, Baltek, Nucor Steel and PPG Industries. Collectively, these companies have invested millions of dollars and employ hundreds of people throughout the state. The Production Tax Credit has benefited these businesses by supporting a market they serve. Without the Production Tax Credit, there is no doubt these existing jobs in North Carolina would be negatively impacted.
Furthermore, several wind farm development companies have proposed building wind farms in the state. New wind turbine technology and advanced assessment capabilities have opened up large portions of North Carolina, and the rest of the south, to new wind energy opportunities. The Production Tax Credit can reduce wind farm developers’ tax levels and keep more cash in private industry, which can then be passed on as a savings to ratepayers. Wind farm projects have been proposed in Currituck, Camden, Carteret, Pamlico, Pasquotank and Perquimans counties. Many of these projects are working with private landowners, county and state regulators, and federal agencies to protect existing industries, and create new jobs. Each of these wind farm projects could inject tens to hundreds of millions of dollars worth of private industry investment into local economies, so long as anti-development activists do not meddle with private property rights or require heavy-handed regulation.
To be clear, the Production Tax Credit is not a hand out, nor is it unique to the wind industry. Wind farm operators receive a tax credit against tax liabilities (not a grant) for each kilowatt-hour of electricity generated; therefore, if a wind farm produces no power, the developers receive no credit. Because the Production Tax Credit for wind energy has now been revoked, the wind industry is at a congressionally manufactured disadvantage to other energy resources that have not had to renew their subsidies. For example, the nuclear industry gained access to a similar Production Tax Credit in the Energy Policy Act of 2005, which is continuously available to that industry until the year 2020. A study by the Environmental Law Institute in 2009 found that between 2002-2008, the federal government provided $72 billion in subsidies to fossil fuel industries, but the renewable energy industries only received about $12 billion.
While the Production Tax Credit for wind energy does take federal money to support initially, the credit pays for itself because it encourages private investment. Those private investments, in the forms of wind farms and manufacturing facilities, then become sources of local, state and federal government revenue for decades. The jobs created and new sources of revenue generated ensure the tax credit is an investment, not a hand out. The tax credit pays for itself.
Congress has a responsibility to promote job creation. Raising taxes on a successful, domestic, clean energy resource is irresponsible and opposed to what the public wants. Congress should immediately renew the Production Tax Credit for wind energy and provide the policy stability already provided to so many other industries.
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