Prepare for the mini-cliffs: Wind and dairy on the brink

For the umpteenth day in a row rhetoric and speculation about the fiscal cliff dominated the news cycle. No one knows exactly what will happen if this unholy marriage  of tax hikes and spending cuts takes effect, but a few industries are facing their own mini-cliffs and it’s easier to predict the aftermath.First, there’s what might be called the windy cliff. In 1992 the government created a production tax credit to incentivize the use of clean, domestic wind power.  The subsidy is a 2.2 cent credit per kilowatt hour of energy produced over ten years, amounting to about $1 million per large turbine. Since the initial credit was enacted, it has been renewed seven times and has been allowed to expire three times.Waiting until the last minute has likely already slowed the growth of wind generating capacity since wind farm developers base their plans on whether the subsidy is in effect. This is what Republicans call market uncertainty, when they’re talking about tax cuts for the rich. According to the BBC, “The tax credit has proved contentious with some lawmakers criticising it as too generous. It lapsed previously in 1999, 2001 and 2003. Each time it lead to a collapse in new construction.”Continue Reading…

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Prepare for the mini-cliffs: Wind and dairy on the brink


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