The Production Tax Credit: Corporate Subsidies & Renewable Energy
The production tax credit for wind energy benefits a few wealthy, politically connected, corporations who received 75 percent of the $19 billion in tax credits between 2007 and 2016.
Wind energy is a $14 billion industry made up of wind facilities, turbine manufacturers, and financiers. While the industry grew over the past few decades, the American Wind Energy Association (AWEA) and its corporate members pushed for new and continued subsidies that would enable large energy corporations to profit at the expense of taxpayers. This study investigates the Production Tax Credit (PTC) and the corporate beneficiaries of billions of taxpayer dollars. The PTC is a federal subsidy for the commercial production of wind energy that provides a $24 tax credit for each megawatthour of energy sold.
· The subsidy cost taxpayers $4.2 billion in 2017 and will cost at least an additional $48 billion before it fully phases out as currently scheduled, in December 2029.
· The PTC distorts electricity markets by encouraging wind energy producers to accept negative prices.
· The PTC primarily benefits only a few energy corporations, with just 15 parent companies accounting for more than three fourths of all PTC eligibility, or more than $19 billion between 2007 and 2016.
Providing subsidies for wind energy benefits large corporations while distorting electricity markets. To further simplify the tax code, federal legislators should resist calls to renew the PTC and instead allow it to fully expire at the end of 2019.