Full Title: Estimating the State-Level Impact of Federal Wind Energy Subsidies - 2013
Author(s): Institute for Energy Research
Publisher(s): Institute for Energy Research
Publication Date: December 1, 2013
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Description (excerpt):
This paper examines the distributional impacts of the wind production tax credit (PTC). The obvious difficulty of this examination is the fact that over the past 10 years (the life of the PTC) some eligible wind facilities have elected to take the investment tax credit (ITC) and the Section 1603 grant program instead of the PTC. As we explain below, this does not change the distributional nature of federal wind subsidies, but merely the timing. For the purposes of this 1 paper, we assume that all wind production built over the last 10 years in the United States elected to take the PTC. We call this the proxy PTC to differentiate this metric from the actual PTC. The proxy PTC is a one-year snapshot based on state-level wind generation data for 2012. It does not look at the full value of the PTC over a 10 year period.
We find that the distributional impacts of the PTC are striking. The top ten proxy PTC-taking states in 2012 received over 72 percent of the total PTC subsidy transfers for 2012. These top 10 states include Texas, Iowa, Oklahoma, Illinois, Minnesota, Washington, California, Colorado, Oregon, and North Dakota.
The net proxy PTC transfers are also striking. To calculate the net impact of federal wind subsidies on each state (whether each state is a net taker or net payer of federal wind subsidies), we compare each state’s proxy PTC payment to its share of the tax burden related to federal wind subsidies.