Tuesday, December 4, 2012

7 Myths About the Wind Production Tax Credit

David Kreutzer, Ph.D.

 December 4, 2012

The wind production tax credit (PTC) has created an industry that produces overpriced, intermittent power, and it will continue to produce overpriced, intermittent power so as long as there is a PTC to pay for it. Here are the top seven myths associated with the PTC:
Myth #1: Wind power is, or will soon be, cheaper than conventional sources.
Fact: If this were true, then there would be no need for subsidies.
First, this is a rerun of an argument that has been made for at least 20 years. Second, if wind were already cheaper, then it could compete right now. If it is on the verge, then wind-power producers could enter into long-term contracts (which they already do) that would allow them to recoup their investments in the near future when wind will supposedly be so cheap. Neither case argues for subsidies.
Myth #2: We need to extend the PTC so that businesses will have certainty.
Fact: The only uncertainty regarding the PTC arises from attempts to extend it.

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