Political  Calculations

We learned something really surprising about the wind energy industry from President Obama's FY2015 budget proposal. He doesn't believe that the industry will ever be capable of economically sustaining itself.

Here's how we know. Tucked away within the proposal, President Obama is proposing making the wind energy production tax credit permanent.

Mr. Obama’s budget would permanently extend the production tax credit for wind electricity, which expired last year after Congress failed to pass a bill renewing it. Over the next 10 years, the tax credit would cost $19.2 billion, according to the budget plan.

Senate Finance Chairman Ron Wyden (D., Ore.) has indicated he wants to pass a bill extending this tax credit and other temporary ones. But it’s unclear whether he has enough support to pass it in the full Senate, and the House seems even less likely to support such a proposal.

Originally established in 1992, the wind energy production tax credit has had a lot to do with fueling the growth of the nation's wind energy generating capacity since its inception. The National Renewable Energy Laboratory reports just how much the installed capacity for wind has grown in the years from 2000 through 2012, much of which has been enabled by the wind energy production tax credit subsidy:

U.S. Total Installed Wind Electricity Capacity and Generation, 2000-2012 - Source: NREL.gov

So with that kind of "success", why does the wind energy industry need a permanent tax credit? After all, the purpose of the tax credit was to greatly accelerate the growth of the nation's installed capacity for wind energy - not to permanently sustain it.


Political Calculations

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