PHASE OUT BUT DON’T CUT OFF WIND SUPPORT

Extend Wind-Power Tax Credit Now, So It Can Die Later

Editorial, August 21, 2012 (Bloomberg News)

“…[W]ind power has emerged as one of the most clear- cut issues of the political season…Obama wants to renew the technology’s soon-to-expire federal production tax credit. Mitt Romney, his Republican opponent, wants to let the credit lapse…[W]ind energy should receive continued federal support, as Obama says -- especially at a time when the industry’s tens of thousands of jobs are helping the U.S. economy. But wind power should also be expected to make it in the marketplace on its own one day, as Romney would have it.”

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“Onshore wind power has improved to the point where it is now the most competitive of all renewable energy sources except hydropower…[I]t is on a path to reach “grid parity” -- the point where its cost is equal to the baseline price of power on the grid…[By] 2016…wind can be expected to thrive without the tax credit…Renewing the tax credit would at least enable the wind industry to return to growth, adding 54,000 jobs over the next four years…Letting the credit expire, on the other hand, would mean losing 37,000 jobs in the sector…It’s [also] a clean energy source, with a promising economic future as the cost per turbine continues to fall…[and] natural gas prices, now extraordinarily low, rise…

“If Congress takes the easy route and simply extends the credits for a year or two, it would only perpetuate the wind industry’s boom-and-bust cycle. A smarter solution is to apply the longer-term planning that is critical to good energy policy…Let the wind industry know the production tax credit will eventually die out, but over four years -- so companies are able to plan…”

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“Even smarter would be to ultimately replace the tax credit with market-based support for wind…[like a national] renewable portfolio standard…[or] a “clean energy standard,” requiring large U.S. utilities to derive an increasing share of their energy from cleaner energy sources -- not only renewables such as wind and solar but also natural gas and even coal with carbon capture and storage. No federal expenditure would be required…Politicians in both parties…could do far more for the U.S.’s energy future if they considered longer-lasting ways to help the wind business succeed.”

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