Wind Power: Why Special Tax Treatment?

A recent article in USA Today (Renewable energy firms clamor for tax breaks) reports on the uncertainty of whether the U.S. Congress will extend the tax credits that subsidize solar and wind power investment. From the article:

Some $500 million in investment and production tax credits will expire Dec. 31 unless Congress renews them. Without that help, solar and wind power companies say they will reverse planned expansions and, in many cases, cut payrolls and capital investment.

Commenting on this article, The Foundation for Economic Education wondered “If they need special tax treatment to survive, what does that tell you?”

It tells me that wind and solar power are not economically viable at the moment. The only way to induce people to invest in these forms of power generation is to give them money.

To learn more about the economics of wind and other forms of power generation, I suggest these articles: Wind Production Tax Credits Aren’t Free of Cost, Mandating Renewable Energy: It’s Not Easy Being Green, Hot Air and Wind, and Energy Independence Isn’t Very Green.

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