A Free-Market Energy Blog

Big Wind vs. Little Taxpayers: An Easy Budget Cut for Trump

By -- November 18, 2016

“After billions in public hand-outs spanning nearly four decades, big wind has never been able to stand on its own and there’s no reason to believe this will change. … If yanking the handouts causes the industry to flat line then so be it. The US has elected a businessman at the helm who understands what it means to cut your losses. It’s time we did exactly that!”

Elections matter! 

Last week, untold thousands of Americans in deep-red counties took a stand. After eight years of “bureaucracy knows best” and the abuses that followed, voters shouted ‘NO’ to the wanton march of government-funded industrial wind turbines destroying the landscape and threatening their communities. The Trump victory will finally put an end to big wind’s vice grip on Washington.

And you can bet the wind sector is in full panic mode. But don’t expect to hear about it in the press. Instead, we’ve been barraged with stories about wind’s unstoppable success, its popularity with windy red-state republicans and how the busy new administration couldn’t be bothered with tax credit programs that are already set to phase down. Within days of the election, one unnamed “major Trump financial contributor” claiming to have the inside track on the transition reassured folks that “everything with renewables continues; the credits will remain in place.”

Sorry. We’re not buying it. And neither is Continental Resources Inc. chief Harold Hamm, Trump’s chief adviser on energy issues who argues that subsidies for renewable energy like solar and wind, and credits for electric cars, should be eliminated.

There are 2 very good reasons to think a Trump administration will act quickly to gut the subsidies.

  1.  End the Abuse.

Trump has been consistent in wanting to end the abuses rampant in Washington. One obvious example is the IRS and its administration of the wind tax credits.

Since 2013, when Congress extended the wind energy production tax credit (“PTC”) and relaxed the terms upon which projects qualified, the IRS has issued five separate guidances explaining how it will interpret the term ‘begin construction.’ In each case, the guidance further relaxed the eligibility requirements to a point where Congress’ PTC phase-out has essentially been nullified allowing full-PTC eligibility to be extended to many thousands of wind megawatts that would otherwise have earned a reduced credit.

Under the latest guidance released this year, a single worker equipped with a hand shovel digging in the vicinity of a proposed wind turbine foundation would be enough to meet the physical work test requirement. There is no minimum amount (or cost) of work required to earn the full credit. So as long as dirt is moved before the end of 2016 and an operating turbine is placed in-service by 2020, full credit will be realized.

This is no exaggeration.

Take what happened this month in Gage County Nebraska after residents observed construction activity near their homes. Bluestem Energy Solutions, who hopes to erect a turbine at the site and sell the energy to the City of Beatrice, never notified the public of the project, never obtained a permit from the County and hasn’t even yet confirmed if the City will proceed with any plan. Nonetheless, Bluestem raced to move dirt so it can claim the 100% PTC should the turbine get built.

Corporations with cash on hand are taking a different route but with the same intent. In October, ReCharge reported that Iberdrola-owned Avangrid authorized the purchase of enough wind components by year-end to lock in the 100% PTC on 2,000 megawatts of new wind. Most of this capacity is not under contract yet, but the economics were worth the gamble. By acting now, Iberdrola preserves nearly a quarter-billion in tax credits that would otherwise be lost if it waited until 2017 when the PTC steps down by 20%. (The dollar figure represents the difference between 100% PTC and 80% PTC, assuming a 30% capacity factor on 2000 megawatts).

These tactics are playing out all over the country. The American Wind Energy Association is now reporting over 20,000 megawatts of new wind under construction or in advanced development. By January, 2017 the 20,000+ megawatts will likely inflate further.

The Trump Administration should act immediately to rescind some or all of the IRS guidance issued since 2013. At the very least it should pull back on the most recent guidance issued last May and also work to tightened the language overall. Such action could be carried out on day-1 of Trump being seated and would not require Congressional involvement.

  1.  Tax Reform.

Now that both houses of Congress and the presidency are held by Republicans, there is a very good chance tax reform will finally proceed.

In March 2014, then House Ways and Means Chairman Dave Camp (R-MI) released his proposal to reform the U.S. tax code which offered no consideration for reinstating the PTC. But that’s not all. The bill retroactively reset the 2.3¢/kWh PTC back to its original 1.5¢/kWh before inflation adjustments. This meant that operating wind projects would lose a portion of their federal payouts. Camp’s recommendations, while not acted upon, signaled bold thinking on tax reform which we are seeing again in the House Blueprint released this year by Paul Ryan and Ways and Means Chairman Kevin Brady. The Blueprint includes many of the signature promises made by Trump during the campaign.

The Blueprint eliminates all energy tax credits but also eliminates depreciation on imported capital equipment and imposes a tax on such imports. Since the U.S. wind industry relies on imports, losing the ability to depreciate equipment would be a blow to project economics. As long as this provision is on the table, Iberdrola would be wise to reconsider its recent orders. Open questions will remain on how the tax provisions are phased in and whether existing wind projects or those under construction will be grandfathered in under the old rules. We’ll be following this closely in the coming year.

Even if there is no immediate action by the Trump administration on tax credits, there are a number of common-sense efforts needed at the federal level to encourage the safer siting of wind turbines. These include curbing the reckless erection of turbines near military, navigational and weather radars.

The Obama administration has not been honest about the effect of wind turbine technology on our national radar systems. In fact, our air space has been made less safe by turbines and our national security compromised because of a policy that allows the spinning towers within 30-50 miles of radar installations.  In effect, the wind PTC, which enables wind development, has worked at cross-purposes with other public funds spent to build/maintain the finest, most advanced radar systems in the world.

This fall, Senator Cornyn (R-TX) introduced a critical bill aimed at addressing this issue. S3428 would remove all eligibility for the PTC and ITC tax credits for new wind turbine projects that would be located within a 30-mile radius of an active military airfield, a military air traffic control radar site, or a weather radar site. Senator Cornyn should be applauded for his foresight and we hope he will bring his bill forward.

Windaction and our thousands of colleagues nationwide are taking Mr. Trump at his word that he wants to drain the swamp in Washington and put the interests of Americans ahead of special interests. After billions in public hand-outs spanning nearly four decades, big wind has never been able to stand on its own and there’s no reason to believe this will change.

Tax credits are now a required component of the industry’s economics, an outcome Congress never intended when the 20+ year temporary credits were enacted. If yanking the handouts causes the industry to flat line then so be it. The US has elected a businessman at the helm who understands what it means to cut your losses.

It’s time we did exactly that!


  1. Richard A Fletcher  

    Totally agree with this argument, all energy should be unsubsidized, and let the consumer choose.


  2. Mary Kay Barton  

    A hearty AMEN Lisa Linowes!

    Just as Donald Trump said, Our country is “being auctioned off to the highest bidder.”
    Nowhere is that more evident than the selling out of American countrysides to Big Corporate, multi-national Industrial Wind developers — for a CONSUMER FRAUD that provides NO net benefit at the expense of taxpayers, ratepayers and our environment.


  3. Stephen E. Ambrose  

    PTC reminds me of a reverse ponzi scheme where benefits are received without spending money, … the ENRON fraud lives on with government support. Thanks to Lisa for “keeping it smartly simple”.


  4. Eric A. Tuttle  

    Green energy subsidies have shed a light on how Greedy Corporation types empower Greedy Government politicians. This is True with All subsidies including over 80 years of Farm subsidies. Just because it is allowable, under the constitution, does not make it the job of government to support any sector of society or business. 95% of what government controls could and should be done by the private sector, at a much lower cost, with only oversight.

    Our Governments primary duty is to Defend this nations borders and people with its Constitution that allows the government itself to exist, with a secondary duty to “oversee” not provide for the welfare of its citizens.

    It is NOT to engage in business where the private sector can serve, nor pit one business or person against another. When and so long as the need exists in defense of this nation, may it (by common will of the people) assist the private sector.

    Green Energy and other subsidized programs is/are NOT in the interest of national defense. Though it is a destructive force upon this nation, physically, socially, morally and via corruption and support, financially.


  5. al  

    I believe that all viable new technologies will flourish if these compete with other technologies on a free-market platform. If wind and solar are viable, after so much time and tax money spent on subsidies, these should not only survive, but also beat coal, oil and gas.


    • al  

      I forgot to add: but most probably they wont survive, let alone flourish, considering that these have failed miserably on all counts.


  6. Jim Wiegand  

    Wind energy truths are lies Here is a quick overview of a terrible fraud based industry being funded by our wasted tax dollars…………….. These turbines have been installed in CA for decades. Huge sprawling areas of So CA have been blighted. So what has been the net benefit from all this destruction? Southern California’s 25 million people are getting about 1/10 of one percent of their total energy needs (includes transportation, manufacturing etc.) from these useless hulks. If the Department of Energy were not a corporate corrupted agency, they would disclose this sort of information to the public.

    There is not enough good wind or nearly enough space for this form of energy to make a substantial impact on the energy needs of America. Adding to this massive fraud on the public is the fact that enough cheap energy in the form of coal, gas and fossil fuel is being exported each year that would exceed the total annual wind energy production by more than 3 times.

    In Southern CA the historical range of the Condor was completely destroyed by this industry and now they are captive to permanent feeding stations in a small mountainous region. The golden eagle population has been decimated but incredibly rigged research is hiding this fact.
    It is against the law to kill eagles, yet when a distraught wind tech tells me about 5 unreported chopped up eagles killed in one month by his company’s turbines and the USFWS does nothing, there is something very wrong with the country.

    When I have evidence of mortality searches written up in a mortality study that never took place and the Interior Department will not investigate, there is something very wrong with this country.

    When a Federally sponsored study on the golden eagle population around Altamont Pass has embellished their numbers by more than ten times, there is something very wrong with the this country and the scientific community.

    When the Eagle Repository has received over 33000 (conservative estimate) eagle carcasses since 1997, with thousands upon thousands of these eagles coming from wind turbines and the Interior Department will not tell the public, we have big time collusion and corruption problems.

    The Denver Eagle Repository or what truly is the “wind industry’s eagle morgue”, holds the hidden truth (exact numbers) about this terribly destructive industry. These numbers along with the origin of the thousands of eagles being received each year, have been covered up since 1997 by new laws put in place by the Clinton Administration.

    These terrible laws were put in place so the wind industry could prosper and lie by omission about their carnage. In 1997 The Freedom of Information Act was changed by Bill Clinton and all USFWS personnel were silenced from releasing any unauthorized information. In other words all information released from the USFWS has been filtered since 1997. If agents disobey and talk or release images of the eagles or endangered species they are picking up from wind farm freezers, they can get 3 years in prison.
    Lease holders, federal employees, and wind industry employees can say nothing about any of this without being prosecuted because they are all tied up with gag orders. It has been with tactics like this that are allowing the wind industry to prosper, rob the public and to hide their slaughter to millions of protected birds annually..


    • Tom Stacy  

      Jim can you offer your source for the figure 0.1% of energy from wind in California?


      • Jim Wiegand  

        This is for Tom…..The figure .01 percent is actually too low. The wind energy production number should be corrected to about .05% of So CA’s total energy usage. I estimated the total energy used by Southern CA’s 25 million people and the estimated net input from their regional turbines. Also keep in mind reported wind industry energy production is fabricated because accounting for energy off the grid flowing into these projects is not required. If want more info for the figures let me know.


      • Wayne Lusvardi  

        Go to Cal-ISO website (California Independent System Operator)


        The second chart shows wind producing about 100 – 200 megawatts per hour out of maybe 24,000 megawatts average for today.

        Say: 150/24,000 = 0.00625 or 0.625% or less than 1%


  7. Tom Stacy  

    First of all, consumers cannot “choose” their electricity sources. That is a misnomer. Physics dictates the flow of electrons through the path if least resistance. The nearest operating power plants power your home and business – regardless of what you buy on paper. Choosing a different retail supplier has little or nothing to do with which power plants are chosen to run to meet instantaneous demand at the many thousands of transmission to distribution nodes across the country. So retail deregulation is not very important in the grand scheme of things – analogous to a business switching payroll companies. And as far as “free markets” for wholesale electricity – if you only knew how inefficiently and distortedly those markets remunerate energy and capacity… they are not the kind of markets that could ever fairly allow winners to win and losers to lose.

    Secondly, eliminating depreciation might not necessarily a bad thing for wind – if they can EXPENSE their capital equipment instead. That would be a windfall for them, essentially allowing them to write off the entire value in year one or applicable carry-forward years. I hope the “blueprints” have an iron clad door to prevent that truck from driving through.


  8. Wayne Lusvardi  

    Is anyone concerned that Trump picked Betsy DeVos for Education Secretary? The DeVos family own a wind energy company.


    DeVos is chairman of the Windquest Group, a privately held operating group that invests in technology, manufacturing, and clean energy. DeVos and her husband founded it in 1989.[2]
    In 2011, DeVos and her husband, via the Windquest Group, invested in Energetx Composites, a wind energy company. They were drawn to it because it aligned with Windquest Group’s clean energy focus. Windquest also invested in another Western Michigan firm, Cascade Engineering, to create a water filter used to help clean water efforts.[20][21][22]


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