Expired federal tax credits for the wind industry are in front of Congress again, but the political future for the long-standing subsidies is anything but safe, according to a new report.
Experts at Capital Alpha Partners, one of a burgeoning group of research firms that provides political intelligence for investors, wrote last week that the appetite on Capitol Hill for continuing the wind energy production tax credit (PTC) is declining.
In a report obtained by the Washington Free Beacon, Capital Alpha writes that a combination of flagging political will and changing market environments could signal the decline, and possibly the end, of the two-decades-old tax credit for the wind industry.
“There comes a time when subsidies which are popular to start with become less popular as conditions change,” the report says. “The wind PTC may be reaching that point—not just because some in Congress are losing patience with the so-called tax extenders, but also because fundamental market conditions are putting the traditional utility model under stress.”
Congress first enacted the wind energy PTC in 1992, and has renewed it seven times since, but the tax credit has faced increasing resistance from fiscal hawks and competing energy interests, who say the wind industry is mature enough to take off the federal training wheels.
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