Coddling the Wind Energy Industry in Florida and Washington, DC

August 21, 2012

Last week in Orlando, groups from around Florida met to discuss ways to advance their failed green energy policies. While they were exploring ways to coddle the renewable energy industry at the 2012 Florida Energy Summit, Senator Bill Nelson is waiting for the August recess to end so that he can return to Washington, DC to do the exact same thing.

Even though industry insiders have declared that Florida is unfit for wind power, there are myriad government programs aimed at developing this technology in the state. It’s time for Senator Nelson and his colleagues in Washington to stop giving tax breaks to wind energy. Unfortunately, Washington is about to do the opposite.

The principal federal support for wind energy, the so-called Production Tax Credit (PTC), is scheduled to expire at the end of this year. Before Congress left for August recess, the Senate Finance Committee passed a measure that would renew and dramatically expand this targeted tax credit, which is projected to cost $12.1 billion over ten years.

Proponents argue that the wind industry needs the PTC in order to get off the ground. But what they overlook is that the wind industry has been receiving subsidies for nearly 20 years and has yet to show any signs of such growth. In fact, in the three years that the subsidies were allowed to lapse, the growth of the industry fell by 93%—proof that the industry isn’t viable unless it is able to gain special exemptions from our overly-burdensome tax code.

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 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, then that technology will demonstrate its value by competing for consumers’ dollars in the marketplace—not by getting favors from Washington lawmakers. When they compete on a level playing field, energy companies have an incentive to become more innovative and efficient in order to make their product attractive to consumers.
Senator Nelson has consistently supported programs for renewable energy production, but we haven’t heard yet from Senator Rubio. He has supported loans and tax credits for boosting energy-efficiency in the past, but has yet to comment on wind production.

If our elected officials were serious about protecting jobs and keeping energy bills low in Florida, then they should let the Wind PTC expire, as scheduled. The Sunshine State is home to over 110,000 Americans for Prosperity activists. Senators Nelson and Rubio should know that we will watch to see how they vote on this issue.

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