Utility Automation & Engineering T&D - GE: Tax revenues from wind farms more than offset tax incentive

New York, NY, June 20, 2008 -- GE Energy Financial Services released a study estimating that a federal tax incentive set to expire Dec. 31 for wind energy projects more than pays for itself through tax revenues from the projects' income, vendors' profits and individual workers' wages. The study, released at the American Council on Renewable Energy's Renewable Energy Finance Forum in New York, estimated that wind farms built in 2007, supported by the production tax credit, carry a net present value benefit to the US Treasury of $250 million.

"Congress is debating how to pay for the wind tax credits perhaps without realizing that, over time, wind farms pump more money into the US Treasury and state and local coffers than they take out," Kevin Walsh, managing director of renewable energy at GE Energy Financial Services, said at the conference. "Our study shows that the wind farms more than pay for themselves through existing tax revenues, so it's time to renew the incentives immediately."

The production tax credit for wind, as well as similar incentives for solar and other renewable energy sources, has expired three times in the past nine years, each time causing a 76-90 percent drop in installed capacity from the previous year, said GE. The most recent attempt to renew the incentive failed earlier this month in a US Senate vote that centered on how to offset the cost of the production tax credit with tax revenues.

"Too often, politics, rather than economics, has shaped the debate about extending the production tax credit," said Michael Eckhart, president of the American Council on Renewable Energy. "GE's new study identifying additional economic benefits of the wind industry should bring all parties together, all supporting a proposition that is good for the environment, good for the economy, and even good for the federal treasury."

According to the study by GE Energy Financial Services, wind projects that went into operation last year generate federal income tax revenues from the projects, individual workers' wages, vendors' profits, and land leases. And they also provide federal tax revenue after 10 years, when the production tax credits expire. In addition to those federal tax revenues, the wind projects generate an estimated $6 million per year in local property taxes, $15 million annually in state income taxes on wages and profits during construction and $1.5 million per year in taxes while operating. Using a model developed by the National Renewable Energy Laboratory, wind farms built in 2007 in the United States created more than 17,000 construction-related jobs and 1,600 long-term operations-related jobs.

Wind makes up 80 percent of GE Energy Financial Services' more than $3 billion renewable energy portfolio. The GE unit's total US wind equity portfolio includes 34 farms that span 13 states and produce 3,550 megawatts of energy. The company also plans to invest $6 billion in renewable energy projects by 2010, including wind, solar, biomass, hydro and geothermal power generation.

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