March 30, 2021
New Legislation Aimed At Giving Developers Direct-Pay Option for PTC Projects
Protect your Property Rights
April 1, 2021
Opinion - Such a gift. Since the mid-1990s the wind power industry has made a living off of a federal tax credit (the Production Tax Credit --PTC) earned according to a formula for whatever power they generated – whether that power was needed by the grid or not – and even if their bidding price in wholesale power markets was zero!
The wind farm owners could turn those tax credits into cash by selling them (typically) to another corporation that needed the tax credits more than the wind farm owner. The buyer of the tax credits would be a profitable corporation that could use the tax credits against the tax it owed. Wind farm owners seldom show significant taxable income because they don’t really need to make money the old-fashioned way. Instead, they rely on these exchangeable tax credits as a primary source of income – a credit against the tax they owe – even if they don’t owe any tax! A tax credit becomes all the “income” necessary, and, of course, a tax credit is no taxable income! Nice!
So what you have in effect is the wind industry living off a federal subsidy in the form of a tax credit that can be sold. That is where the “profit” is in the wind business. It is not a profit in any traditional business sense, but it is real money and it has drawn hundreds of developers – large and small – into the wind business to enjoy the benefit of something generally not found in the business world – a sure thing.
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This tax credit mechanism is an indirect way for the federal government to pay the wind power business to exist. Wind power is thus really not a business; it is a federal program run by private contractors. And these private contractors are not paid directly by government appropriations. They are paid “off budget” through the Tax Code.
(I know! – but this is all true. You can’t make this up.)
But now Senators Carper, Heinrich and Whitehouse (among the wind lobby’s best friends in Congress) want the Tax Code amended to allow wind generation owners (and the other renewables owners) to skip the step of “earning” the PTC and marketing it to buyers. They are saying that for new wind projects, wind developers should be free to simply calculate what their tax credit will be and then the government will just issue a check for that amount. Done. Why make this complicated? Why should wind owners have to wait for their money?
(The accountants who work for wind developer/owners will like the straightforward simplicity of this. But perhaps the Wall Street investment bankers who package these tax credits and find buyers for them, and take their cut, won’t like the fact that their services will no longer be needed.)
The following series of graphics are an attempt to break down and explore one Industrial Wind topic at a time to try to better understand "how big wind works". They are, in no way, a complete unraveling of that particular topic and we encourage you to further research each to better educate yourself, your friends and family. Download and share these graphics. Use the source links to view videos, read documents and explore websites for more information.
HOW BIG WIND WORKS
SOURCE LINKS "Topics One, Two, and Three":
Main Tier RPS
video - no partner
tax video at minute 4:45
video - prospecting
video - request expansion
videos - town meetings
ESRM charges effective 4/1/2017
Getting Renewables Sited in New York
override local laws
November 28, 2018 “…the original intent of the law was, in the public good, the state should be able to override local laws so that we all could have safe, and now clean, electricity.”
video - inefficiency
Northern NY Wind
What you need to know about Industrial Wind Farms