Posted by on March 23, 2020 11:09 am
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By Oliver McPherson-Smith, American Consumer Institute


Wind power has gradually become the leading source of renewable energy in the United States. With strong consumer demand for lower carbon energy and new technology lowering the price of production, wind power now rivals solar and fossil fuels on cost. Despite wind’s success, conflicting federal policies are picking winners and losers in the industry while fleecing taxpayers through corporate welfare. To truly unleash the benefits of wind power for all Americans, the federal government should leave the market to its own devices.


In recent years, wind turbines have become bigger, more efficient, and cheaper to build. Unlike solar panels, wind turbines have the potential to longer of the course of a day, making them a unique addition to the country’s energy mix. The development of offshore wind power also represents an opportunity to expand wind power’s role. As the Department of Energy notes, nearly 80% of America’s electricity demand occurs in the coastal or Great Lakes states where offshore wind generation could be feasible. Given the momentum in the renewable power industry, it is unsurprising that the Energy Information Administration predicts that the cost of solar and wind generation will continue to fall in the coming decades.


However, the industry’s trajectory is facing new headwinds in the form of onerous and arbitrary federal permitting. An off-shore windfarm near Martha’s Vineyard in Massachusetts, for example, is being stalled by the Department of the Interior due to delays in gaining the requisite permits. The project would be the largest offshore wind development in the United States and would represent a significant landmark in the American renewable energy industry.


The federal brakes on this project scuttle a good solution for a context where other renewable energy sources appear less viable. While it may be attractive to install solar panels in New England, the brutal northern winters cap their efficiency for a significant portion of the year. Similarly, although offshore wind is more expensive than its onshore counterpart, turbines located far from the coast can sidestep traditional ‘Not-In-My-Backyard’ opposition. By slow walking the decision process for the $2.8 billion project, federal authorities are depriving the local community of jobs, as well as 400,000 consumers of an alternate source of energy.


Unfortunately, federal interference in the wind power industry also impacts taxpayers across the country. The renewable energy production tax credit, which gives companies a credit based on each kilowatt-hour of electricity they sell, was most recently extended in late 2019 for another year. The issue with these tax credits, that were originally introduced in 1992, is that their rationale rings hollow in 2020. Some will advocate that tax credits and subsidies are needed to get the technology off the ground and support the uptake of renewables.


However, the state of the market today suggests that these industrial fledglings are full-grown hawks. For example, America’s largest wind and solar power company, NextEra Energy, had a market capitalization of $74 billion in 2018. While the company’s commercial success is a commendable achievement, it simultaneously makes the case that it is not desperately in need of federal tax money.


This problem isn’t unique to the wind industry. For almost every form of energy production, fossil fuel or not, there exists a federal subsidy, tax credit, or creative incarnation of corporate welfare. What they all share in common is that the taxpayer funds it, and shareholders collect the profit.


For the benefit of consumers and workers, the federal government should stop blowing the wind industry off course. Picking winners and losers, while transferring hundreds of millions of taxpayer dollars to corporate profits, makes the country’s wind policy a case of one step forward and two steps back.


The American wind industry has demonstrated the brilliant innovation it is capable of—federal authorities should let them get on with it.


Oliver McPherson-Smith writes for the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit