As the renewable-energy industry fights to keep multiyear tax credits from expiring in the United States, General Electric (NYSE: GE) has delivered another weapon.
The study, published Wednesday by GE Energy Financial Services, argues that wind farms generate more tax money than they use in federal tax incentives.
Last year, wind farms built with the help of a production tax credit will deliver federal tax revenue that exceeds the cost of the incentive program by $250 million, according to the study, which included taxes from workers’ wages, company profits and land leases.
That number doesn’t include state or local taxes.
According to GE, the tax credit pays 2.1 cents for every kilowatt-hour of power generated from approved projects for 10 years. The credit program, along with similar incentives for solar and other renewable energy sources, is set to expire at the end of the year if it is not renewed.
The renewable-energy industry have been fighting what has been a losing battle to establish multiyear incentives before the expiration date (see Senate Blocks Renewable Incentives Bill, Solar Industry’s Five-Step Plan, Solar Sharpens Weapons for Incentive Battle and Senate Rejects Green Incentives to Pass Energy Bill).
The latest loss came Tuesday when the Senate failed to break a Republican filibuster on a $17 billion bill that would have extended renewable-energy tax credits for eight years (see Green Light post).
But the industry has historically had little luck in keeping incentives stable.
According to GE, when the production tax credit lapsed three different times during the last decade, each time it dropped the amount of installed wind capacity by at least 76 percent from the previous year.
"The on- and off-again nature of the production tax credit has really hurt in terms of putting in place a manufacturing industry in this country," said Randall Swisher, the executive director of the American Wind Energy Association (AWEA), during a press conference to discuss the study Wednesday.
Of course, GE has a huge reason to keep federal production subsidies going.
Wind makes up to 80 percent of GE Energy Financial Services’ more than $3 billion renewable-energy portfolio.
But many renewable-energy companies and industry organizations, have insisted that long-term credits are key to creating stability.
A variety of challenges have been blamed for the inability to pass multiyear tax incentives, including fierce bipartisan differences on how to pay for them.
Among the solutions suggested during Wednesday's press conference were to have President George Bush take a public position backing legislative approval.
"He is for this," said Michael Eckhart, President of the American Council on Renewable Energy.
Eckhart claimed that was his takeaway from the president after a meeting with him, but it doesn't look like Bush will be making any such declarations soon.
In a speech Wednesday in the White House Rose Garden, Bush called renewable energy a long-term solution to reducing oil demands and said the country must expand American oil and gasoline production for the short-term.
"In the short run, the American economy will continue to rely largely on oil. And that means we need to increase supply," he said.
The president suggested increasing access to the Outer Continental Shelf by lifting the ban on oil exploration in the area and permitting exploration in the Arctic National Wildlife Refuge.
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