Taxpayers gave $18.6 billion to wind power producers since 2005, with most states paying more in taxes for wind subsidies than wind power producers in those states are receiving, a new study shows.
The Institute for Energy Research, a pro-fossil fuel group, released a report estimating wind power’s cost and benefit to each state through federal tax credits and government programs. The report found 30 states and the District of Columbia are subsidizing wind power producers in the wind-swept states that benefit from government subsidies.
However, the report argues the losses are spread out among all federal taxpayers because the companies that produce wind power are the ones receiving the subsidies.
“Subsidies to wind producers come at the expense of all taxpayers everywhere. In other words, federal wind subsidies do not necessarily make citizens of a ‘net subsidy’ state better off,” the report states.
According to the report, California is the state that is the most in the red, with its taxpayers at a net loss of $1.26 billion over the last 10 years. New York and Florida are the two other biggest net losers, to the tune of $1.08 billon and $920 million, respectively.
Texas wind producers have been the biggest beneficiaries of taxpayer subsidies in the last 10 years, according to the report, with a net gain of about $3 billion. Iowa has profited to the tune of $1.6 billion and Oklahoma was also up about $894 million, the study reported.
“Subsidies to wind producers in the relatively few states with excellent wind resources represent losses to the majority of the states within the U.S,” the report said. “Even in states that seem to accrue net ‘benefits’ from federal wind subsidies, these subsidies merely redistribute wealth from taxpayers to wind companies.”
To come up with the figures, researchers at the Institute for Energy Research used federal data to find the amount of wind energy produced by each state for each of the last 10 years. They took those figures and multiplied each state’s total by the Wind Production Tax Credit for that year to come up with the state’s total federal subsidy.
They then used data from the Internal Revenue Service to estimate the share of federal tax burden carried by each state for each of the last 10 years. Researchers multiplied the share of federal tax burden by each state’s total of federal wind subsidies for each year.
To get the final impact of wind subsidies for each state, the researchers subtracted the state’s federal subsidy from the amount the state paid in federal wind subsidies for that year.
The American Wind Energy Association published a blog refuting the report, saying it had “error-ridden, false claims.”
Greg Alvarez, editor of the association’s Into the Wind blog, wrote the report did not take into account many benefits of wind energy. He wrote wind power supports well-paying jobs, limits carbon dioxide emissions and protects consumers from fluctuations in oil prices.
“This is nothing new,” Alvarez wrote. “This anti-renewable energy group may continue to attack American-supported wind power and policies advancing its growth, but its attacks aren’t credible.”
