GE Study Finds Tax Revenues from Wind Farms Offset Tax Incentive
Confused by the rhetoric on all sides of the current debate over whether or not to renew the federal renewable energy Production Tax Credit? Would you like to be able to address the issue in an informed and persuasive manner?
A study released in June by GE Energy Financial Services finds that, over the average 20-year projected life-span of a wind project, the revenue streams to the federal treasury from the construction and operation of the wind project result in a net gain to the federal government even given the current cost of the federal production tax credit (PTC).
The study was based on projects becoming operational in 2007. By the end of the 20-year project life-span assumed in the study, the $2.5 billion investment by the federal government in these projects through the PTC (the study assumed that the federal government would borrow this money and includes those borrowing costs) would show a return of $250 million. Averaged over the life of the projects, this would represent approximately a 5% per annum return on investment. Most of this return would, however, be realized in the last half of the expected life of these projects. Read the report summary, which also hints at the local economic and ecological benefits not included in the study's calculations, for more details.
Addendum: 8/8/2008 - a very good and readable critique of this GE report was posted on LeonardoEnergy on 7/17. It's worth reading as a follow-up.