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Can we size these tax credits, please? Lots of argument in both directions without any sense of scale. If the tax credits artificially cheapen the price by 10%
by GCA10 8y ago
Can we size these tax credits, please? Lots of argument in both directions without any sense of scale. If the tax credits artificially cheapen the price by 10% (i.e. 7.2 cents/kwh becomes 6.5 cents/kwh), they're not a major distortion.
If they cheapen the price by 50% (13 cents/kwh becomes 6.5 cents/kwh), then that's a big thumb on the scale.
Until there's more clarity on this, it's hard for me to take a side.
- mikeyouse 8y agoThe wind energy production tax credit was $0.023 per kwh in 2016 -- It's indexed to inflation and then stepped down by 20% per year from there. So for projects initiating in 2018, the PTC should be $0.023 x 1.03^2 x 60% . (3% inflation for 2 years, 40% discount). So this project should expect to see ~$0.0146/kwh or 1.46 cents/kwh in subsidy.