Investor Warren Buffet once famously said: “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.” A recent study by one of DOE’s premier National Labs seems to prove his point.
Lawrence Berkeley Laboratory found that U.S. wind farms are producing less power after ten years of production because the loss of the federal production tax credit at the ten-year mark stops maintenance. The Department of Energy Laboratory study looks at how wind turbines across the United States degrade over time. The lab found that after the first 10 years of operation, wind turbines tended to experience an “abrupt decline” in performance that continued as time went on, despite being able to produce more electricity given wind conditions at a specific site. The study explains that since wind farms no longer have access to the production tax credit after ten years of operation, wind farm owners were making the financial decision to do less to protect against equipment wear and tear. After 17 years of operation, the lost energy was equivalent to losing 1 out of every 10 turbines in a wind farm. This finding should make policy makers examine the production tax credit construction carefully since it has many negative consequences—this finding by the laboratory is just one.