When I debate proponents of wind power, whether in print, on television, or on the radio, they regularly proclaim that wind power is cost competitive in the market place with more conventional sources of energy; cheaper than new coal and only slightly more expensive than the spot market price of coal fired energy already on line. They even go so far as to claim that this is true even if one removes the tax credit/subsidy that wind producers receive. As I pointed out a few years ago, the price of wind power has fallen dramatically. However, evidence abounds that it still can’t compete on a cost basis. Within days of the tax credit lapsing (for a few brief months) in 2003, projects were scrapped and people in wind turbine production facilities were laid off. Have things changed? The evidence says no. While wind power is profitable, more than half the profit is the result of subsidies. If the subsidies were to lapse, new facilities would still make a profit — but their reduced profit margins would make them unattractive investments, and they’d struggle for capital.

The Senate’s proposed “economic stimulus” package would pour $3 billion taxpayer dollars into the renewable power industry (most of that for wind) by extending the tax credits for an additional year. The current credit doesn’t even expire until the end of 2008, yet there is already a rush to extend it. If wind power is all grown up and can stand on its own two feet, why fight so hard for a renewal of the credit?

According to the American Wind Energy Association and a new study by Navigant Consulting, the renewable energy industry will lose over 116,000 jobs (over 76,000 in the wind industry alone) and $19 billion dollars in one year alone, absent an extension of the credit. Investors are already holding back on decisions to invest in new wind and solar at the end of 2008. Are there no banks, venture capitalists, or investors willing to put their money into this industry? Of course, the $3 billion is their money — it’s their tax dollars. One wonders what kind of return they might realize if they got to invest those billions themselves — if government weren’t shoveling taxpayer dollars into the pork trough.

With some of the biggest companies in the world (GE, BP, Shell, to name just a few) investing heavily in renewable energy technologies, it is time to wean the baby from the bottle. These profitable industrial powerhouses shouldn’t be receiving taxpayer-funded corporate welfare.

Another interesting story in this regard comes out of California: The Los Angeles Daily News reports that, of the $18 million the LA Department of Water and Power has spent subsidizing residential solar power installations, nearly 75 percent of the funds have gone to just 633 customers in the richest areas of the city. In poorer neighborhoods — with more than twice as many residents, collectively — 300 people have received $4.9 million. Close to $33 million more in public funds have been steered to solar installations for 89 commercial customers. And since the money for these programs is raised through a fee levied on ratepayers — and the poor spend a greater proportion of their income on power than the wealthy do – the poor get soaked twice: first with a regressive tax; then when most of the money is handed out to wealthy homeowners and businesses. As Water and Power President Nick Patasaouras puts it, “The rich boys and girls are subsidized by the little guys.”

The kicker is: Despite all the spending, the subsidies have only produced 10.2 megawatts of power since 1999, well below the pace to meet their goal of 280 megawatts by 2016. Thus far, despite all the promises that public investment in renewable energy is for the greater public good, it really amounts to welfare for the well-to-do.