In recent years, technological advances and forward-thinking policy have made Illinois a national leader in wind energy. The Land of Lincoln is now home to more than 3,334 megawatts of wind generation, enough to power nearly 1 million homes.
A recent study from Illinois State University found that wind farms mean almost $6 billion to the state’s economy, including 19,000 short-term construction and maintenance jobs, over 800 long-term operations jobs, $28.5 million in annual property tax revenue for rural communities and $13 million in annual lease payments to Illinois farmers and landowners.
But many in the Rockford-area have recently criticized the state and federal policies that benefit wind and other renewables. Those critics misunderstand the structure of those renewables polices and lack knowledge of the federal and state assistance to fossil fuel industries.
The federal tax credit for renewable-energy production provides tax relief for every megawatt-hour of clean electricity produced. In short, generate renewable power, get a tax break. Even calling the PTC a subsidy is incorrect. Calling tax relief a subsidy assumes that all money belongs to the federal government. Rather, a tax credit leaves more money in private hands, fostering investment in beneficial technologies.
Every other energy source has its own form of government support, including tax credits, subsidies, preferences, set-asides or other beneficial policies. A recent study from the Congressional Research Service points out: “For more than half a century, federal energy tax policy focused almost exclusively on increasing domestic oil and gas reserves and production. … These provisions remain in the tax code in limited form today.”
Those incentives include the percent depletion allowance and deduction of intangible drilling costs for oil, gas and coal; the Price-Anderson Act capping nuclear liability; and the government-funded construction of ports and pipelines to serve oil delivery.
The difference between these and the wind-energy PTC is that fossil fuel incentives are permanent. Some go back nearly a century. Yet we have a political debate about the wind PTC every few years, resulting in an on-again, off-again cycle that deprives the renewables industry of the stability that competitors have enjoyed for decades and all businesses need to thrive.
Wind energy won’t need the PTC forever, but it doesn’t make sense to require the burgeoning clean-energy industry to stand on its own today, when fossil fuels have enjoyed many decades of generous support and continue to do so.
Illinois has a similar policy to most states. Our 2007 Renewable Energy Standard law requires utilities and electricity suppliers to provide consumers an increasing percentage of energy from renewable sources, with a goal of 25 percent of our electricity by 2025.
This law has a hard requirement that the RES cannot increase consumer bills by more than one-half of 1 percent over the previous year’s costs. But we’ve found that renewables are actually lowering power bills in Illinois. Because wind has no fuel cost, generators can bid their power at near-zero prices, and this has translated into reduced power costs of $176 million for Illinois consumers, according to a recent study from the Illinois Power Agency.
Much of this information is often lost in the public debate about renewable energy. But as the public and political leaders learn more, many of the concerns about wind energy decrease and Americans continue to embrace this clean, homegrown renewable-energy source.
