Authored by Jonathan Lesser via RealClear Wire,
The green energy subsidies in the Inflation Reduction Act (IRA) have been justified by the Biden Administration as a booster of U.S. economic growth and jobs. But when the subsidies are tallied and the overall impacts evaluated, the IRA is a job and economic growth killer.
Under the IRA, the lion’s share of subsidies will be paid to wind and solar developers. The subsidies will not expire until electric industry carbon emissions fall by at least 75% below 2005 levels, after which they will gradually decrease. Even the most optimistic forecasts prepared by the U.S. Energy Information Administration (EIA) show that this will not occur until at least 2046. Thus, the subsidies for wind and solar will continue unabated for decades. In total, the subsidies will far exceed what the U.S. government spent in today’s dollars to combat the Great Depression.
The single largest subsidy is the federal investment tax credit (ITC). Most wind and solar projects will be able to claim a minimum 30% ITC, plus be eligible for an additional 10% credit if the projects rely on domestic manufacturing for components.
The EIA’s optimistic forecast projects about 900,000 megawatts (MW) of solar photovoltaics, 350,000 MW of onshore wind turbines, and 24,000 MW of offshore wind by 2046. If all of this generation is built, it will result in direct ITC subsidies totaling between $500 billion and $1 trillion, depending on construction costs. The greater the costs, the larger the subsidies. Although wind and solar proponents still claim costs are falling, the reality is the opposite. ... Continue reading >>>
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