Expensive, Inefficient, Outdated: The Wind Production Tax Credit

The wind production tax credit (PTC) is set to expire at the end of the year. The credit is worth 2.3 cents per kilowatt hour and generally applies for 10 years. Tax breaks for renewables excluding hydropower amounted to $8.2 billion in 2010.

 This is two-thirds of all energy tax breaks, even though these renewables produced only 4 percent of U.S. electricity.  

Energy produced by windmills is more expensive than energy generated by natural gas. The Energy Department calculates that energy produced by wind is 30 percent more expensive than energy produced by a natural gas plant.

Due to the intermittent nature of wind power, traditional power plants have to adjust production in a very short time frame to balance the power grid. This “cycling” is inefficient and bad for the environment. Emissions offset by the installation of wind turbines appear to be surpassed by emissions from the need to cycle.

When the wind tax credit was put into place in 1992, it was thought that the United States needed to be self-sufficient in energy so that the country was not at the economic or geopolitical mercy of OPEC. This is no longer a major concern since new hydrofracturing technology has made it possible to access 200 years of natural gas and North America will soon be the leading oil producer in the world.  

It is time for this expensive, inefficient, and outdated tax credit to end. Congress should let it expire on December 31, 2013.