This blog entry was written by Allie Brown, former Clean Energy Advocacy Manager at SACE.Guest Blog | March 3, 2014
The Production Tax Credit (PTC) has led to the broad development of wind energy across the country. This federal incentive has worked exactly as designed, exceeded expectations and has led to billions of dollars of investment from the private industry. Yet, the PTC has recently experienced short-term and unpredictable extensions. Congress allowed the tax credit to expire at the end of 2013, creating instability in the wind industry and placing thousands of American jobs at risk. Over the years, the PTC has enjoyed broad bipartisan support; however, recent attacks on the wind industry have focused on ignoring the history of strong conservative support for the PTC. Here are ten reasons why conservatives support the PTC.
#1: The PTC was developed by conservatives.
To support the American-made wind industry, President George H.W. Bush signed the Production Tax Credit (PTC) in 1992. Every president since then has renewed this tax credit in order to reduce the overall tax burden on the relatively new wind industry, highlighting its wide bipartisan support.
#2: The PTC is conservative policy.
Tax credits have a long history of being supported as conservative policy. Tax credits reduce governmental burdens on private industry, allowing private industry and the free market to work more effectively. Conservatives abhor raising taxes; but because of a dysfunctional Congress, the PTC has lapsed and thus taxes have risen on the wind industry.
#3: The PTC creates domestic energy jobs.
The wind industry has invested billions of dollars and employ thousands of people across the country. According to the American Wind Energy Association (AWEA), the wind industry provided 80,700 full-time jobs in 2012. Manufacturing plays a notably large role within the wind industry with more than 550 facilities across 44 states. With the PTC extension, this homegrown energy will continue to grow–providing more US jobs and greater national security.
#4…and the majority are in conservative districts!
The American Wind Industry is particularly successful in conservative districts. In fact, GOP congressional districts contain 75% of wind energy capacity and currently host over 70% of wind energy manufacturing facilities. As a result, conservative organizations have formed, like the Red State Renewable Alliance, in support of the opportunity wind energy provides for local job creation and increased economic growth.
#5: Tax credits help the free market and are not subsidies.
Since the PTC is only awarded to companies that produce energy, it is not a subsidy. According to former Representative and presidential candidate Ron Paul (R-TX), “As a believer in the free market, I don’t look at a tax credit as a subsidy,” he said about the PTC and the wind industry. The PTC has worked exceptionally well with over 60,000 megawatts of wind power installed around the country; enough to power 15 million homes.
#6: Tax incentives are not unique to the wind industry: The PTC “levels the playing field.”
Biomass, hydroelectric, geothermal, and tidal energy are just a few of the other renewable energy systems that benefit from the Production Tax Credit. The nuclear industry gained access to a similar Production Tax Credit in the Energy Policy Act of 2005, which is continuously available to that industry until the year 2020. A study by the Environmental Law Institute in 2009 found that between 2002-2008, the federal government provided $72 billion in subsidies to fossil fuel industries, but the renewable energy industries only received about $12 billion. Because the PTC has recently expired, the wind industry is at a congressionally manufactured disadvantage to other energy resources that have not had to renew their subsidies.
#7: The PTC drives private investment.
The PTC can reduce wind farm developers’ tax levels and keep more cash in private industry, which can then be passed on as a savings to ratepayers. The wind industry works closely with private landowners, county and state regulators, and federal agencies to protect existing jobs while creating new ones. Those private investments, in the forms of wind farms and manufacturing facilities, then become sources of local, state and federal government revenue for decades. The jobs created and new sources of revenue generated ensure the tax credit is an investment, not a hand out. In 2012, the wind industry put $25 billion in private investment into our national economy.
#8: Without the PTC, Americans will be laid off.
In 2012, the uncertainty of a PTC extension resulted in layoffs across the country. Without the PTC, there is no doubt that existing wind jobs in the United States will be negatively impacted in 2014, as well.
#9: Americans want wind energy!
The American Wind Industry has become widely popular regardless of political affiliation—two independent polls taken in 2013 by Gallup and Navigant confirm that over 70 percent of Americans supports this clean, domestic source of renewable energy. In Kansas, where significant wind development has taken place, some 90% of voters believe that “Using renewable energy is the right thing to do for the future of our state and our country.”
#10: Top conservative leaders support a PTC extension.
Due to many of the reasons above, top conservatives have voiced support for the PTC. In 2011, Republican Governor Terry Branstad (Iowa) led a bipartisan coalition to support the PTC for wind energy. In 2012, 16 Republican House members joined together to send a letter to House leadership to encourage an extension of the PTC. These leaders understand the role that the PTC plays in boosting the wind industry and recognize the economic benefits wind energy provides for their districts.
With evident conservative support for both wind energy and the PTC extension, Congress should immediately renew the tax credit for wind energy and provide the policy stability already available for many other industries. The PTC would provide a more secure future for the American Wind Industry and help increase the utilization of wind energy here in the Southeast.