Federal incentives of various types for energy sources have been in place for nearly 100 years, and they've played a useful role in helping develop our nation's abundant resources and propel America's economy to world leadership.
Going forward, we at the American Wind Energy Association would like to see the following principles applied to federal energy incentives:
First, knowing we have spent nearly 100 years subsidizing fossil fuels and conventional energy, current energy incentives should be consistent with current national energy goals. If goals include security, diversity, clean, and homegrown energy, incentives should be directed primarily toward technologies that have the ability to deliver on those goals today and in the future. Clear use of incentives helps new industries develop supply chains and bring down their costs through volume production. Currently, this is not the case–subsidies for the fossil fuels industries, which have been in place for decades, are still far larger than those for renewable energy.
Second, any use of incentives should be consistent over time, to provide the stability and certainty that manufacturers need to invest in new factories and create well-paying jobs. Again, this is not the case–the tax incentive for wind power has been allowed to expire three times in the past decade, each time bringing the industry to a screeching halt and causing companies to lay off skilled employees and shelve investment and expansion plans.
The implications of these principles are clear: incentives for wind, which have been in place for a far shorter time than those for other energy industries, should not be the first to be withdrawn. The U.S. should mirror national energy goals with national energy incentives. While the wind industry has delivered great progress of cost reduction and performance improvements over a short time, it is important for the industry's future and its long-term growth potential that its incentives not be allowed to expire at the end of 2012, halting the scaling up of the U.S. wind component manufacturing that is occurring and that will continue to bring down costs.
Wind power is clean, affordable and homegrown, and a proven source of new American manufacturing jobs. But it needs a level playing field in order to compete effectively with the far larger heritage energy industries.