Wind Energy Policy

According to the Congressional Research Service, for more than half a century, federal energy tax policy focused almost exclusively on increasing domestic oil and gas reserves and production. There were no tax incentives promoting renewable energy or energy efficiency. In the last century, this created an abundance of affordable domestic energy, powering strong economic growth but also building an addiction to fossil fuels. Today’s energy concerns – such as volatile prices or environmental risks – are creating a need for a more diverse energy supply.

Every energy technology is supported by the federal government. The Government Accountability Office estimated federal incentives for electricity between Fiscal Year 2002 and 2007, concluding that: “Tax expenditures largely go to fossil fuels: about $13.7 billion was provided to fossil fuels and $2.8 billion to renewables.”

Some energy incentives, like the depletion allowance for oil and gas, are permanent in the tax code and have been in place since the 1920s. As a matter of fact, U.S. government subsidies for oil, natural gas, and coal have totaled more than $500 billion from 1950 to 2006, according to the Management Information Services Inc. Wind energy’s primary incentive, the Production Tax Credit, has been allowed to expire multiple times, including in 1999, 2001, and 2003, causing a market drop of 73% to 93%; it has been consistently reinstated for only 1‐or 2‐year terms. On January 1, 2013, Congress extended the Production Tax Credit for projects that start in 2013.

In effect, many subsidies for new, clean energy technologies are temporary, while many for older, polluting energy technologies are permanent.

 

More Information on Wind Energy Policy

Colorado State University’s Center for the New Energy Economy launched the Advanced Energy Legislation Tracker, an online database of energy-related state legislation pending in all 50 states. The first-of-its-kind database was created in partnership with Advanced Energy Economy, a national business organization representing the advanced energy industry.

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