Subsidies such as the wind production tax credit (PTC) and 1603 Treasury grant program could be modified to save the government money while still achieving the same boost to renewable energy, according to a new report. The report, produced by the Climate Policy Initiative, recommends recalculating the wind PTC as a taxable cash incentive for production and instituting a 20 percent cash grant program instead of the 30 percent investment tax credit, a key solar industry provision.
The study also suggests that more wide-ranging policies such as a clean energy standard or cap and trade program could be even cost-effective.
Under current law, a wind facility operating by the end of 2012 receives a PTC of $22/MWh for electricity generated in its first 10 years while a solar photovoltaic facility operating by the end of 2016 receives an investment tax credit (ITC) equal to 30 percent of eligible project investment costs.
The entire report is available here.
Read more financial news