64 conservative groups, led by Koch brothers-backed Americans for Prosperity, sent a letter to Congress urging it to allow the wind energy production tax credit (PTC) to expire at the end of this year.
Mitt Romney has also come out against extending the PTC.
The letter says the wind industry has become too dependent on the PTC, which provides a 2.2 cent per kilowatt-hour tax credit for wind farms.
The letter says:
Dear United States Senators and Representatives:
The principal federal support for wind energy, the so-called Production Tax Credit (PTC), is scheduled to expire at the end of this year. The undersigned organizations and the millions of Americans we represent stand opposed to extending the wind PTC. This special provisioncontinues the deplorable practice of using the tax code to favor certain groups over others.
Whenever the government protects a particular industry, as it has with wind energy production, the industry tends to remain dependent on it. As Nobel laureate economist Milton Friedman noted, "The infant industry argument is a smoke screen. The so - called infants never grow up."
The wind PTC, like other green energy incentives, is a prime case in point. The PTC was created in 1992 to get the wind industry off the ground. Yet 20 years later, we have little to show for it. We're still providing a $5 billion special tax break each year for an industry that supplies just over 2% of our power.
If a new technology truly has worthwhile benefits for American consumers such as lower cost,higher efficiency, or environmental benefits, then that technology will demonstrate its value by competing in the open market for consumers' dollars - not by living off of special provisions inthe tax code. American consumers - not Washington lawmakers - should decide the future of American energy.
It is time to end special tax provisions that distort the energy market and increase energy prices. We urge you to let the wasteful wind PTC expire as planned at the end of the year.
What About Oil, Gas & Nuclear Subsidies?
Meanwhile, these same groups continue to block President Obama's attempts to eliminate $4 billion in annual tax credits for the oil and gas industry, which dwarf that of the wind industry many times over.
After decades of support, the nuclear industry is still not viable without governnent support, states a 2011 report by the Union of Concerned Scientists.
The report notes that nuclear subsidies have been so large over the past 50 years in proportion to the value of the energy produced that in some cases it would have cost taxpayers less to simply buy kilowatts on the open market and give them away.
The wind PTC has been the victim of boom and bust incentives - it has not continuously been in place for 20 years.
Pushing for Wind
President Obama continues to push Congress to extend the wind PTC, calling for permanent extension in his energy plan. Last month, Senate Majority Leader Harry Reid (D-NV) expressed confidence that the wind PTC would be renewed.
The Obama administration, Democrats and Republicans in "wind" states want the PTC renewed because of the jobs it creates. A recent Department of Energy report shows preserving the PTC will protect 75,000 jobs as well as a blossoming new US manufacturing sector that has 500 plants.
Many wind projects have already been cancelled and Vestas and other manufacturers have announced layoffs and plant closures because of the pending expiration. Vestas alone plans to lay off 1400 employees after investing over $1 billion in US plants.
Ernst & Young places ranks the US after China as the most attractive country for renewable energy investment because of uncertainty over the future of the renewable energy production tax credit (PTC) and because of the increasingly fossil fuels oriented political landscape.
While the wind industry continues to grow around the world, it's currently suffering from a combination of factors - low natural gas prices, recessionary headwinds, as well as loss of government support. It will be a tough 2013 for the industry.