The wind tax credit provides financial support for wind generation and is the major federal-level policy artificially sustaining the industry. There is no convincing case for encouraging the production of costly and unreliable wind generation by giving it a tax credit. The cost of abating carbon using wind energy is high relative to alternatives and distorting investment in generation capacity erodes productivity as well as slowing job creation and growth.
The myth of generous subsidies for fossil fuels is used by the industry as a foil to shift attention from the scale of the tax credit. The Energy Information Administration’s most recent examination of direct federal support to the energy sector found that renewable generation received fully $15 billion out of over $29 billion in total taxpayer largesse in 2013, the bulk of which flowed to wind, solar and biofuels. Financial support for coal, by comparison, was just over $1 billion, even though coal contributes twice as much generation capacity.