Date of Award
Union College Only
Bachelor of Arts
wind, costs, gas, tax, development
The development of renewable wind energy in the United States is a capital intensive and costly venture, and is heavily dependent on economic subsidies and tax credits offered by the federal government. This study tests the effects these subsidies have on the costs of potential wind development when compared to development costs of traditional fossil-fuel based, natural gas electrical generation sources. In the study, models were constructed to determine the present value of cost for both the wind and natural gas generation sources under different conditions. Initial tests were done for the unsubsidized costs of a 500 megawatt installed wind project compared with a 500 megawatt combined cycle gas turbine, as these tests served as the baseline for the application of variables later in the study. These variables included applying a Production Tax Credit and Investment Tax Credit to wind costs, as well applying a hypothetical carbon tax and fluctuating natural gas prices on the costs of the combined cycle gas turbine project. In conclusion, it was determined from the data produced in the models that the continued policy renewals of the aforementioned economic subsidies are necessary in order for the future economic viability of wind development in the United States. Barring the implementation of a policy such as the carbon tax presented in the study, the lack of these subsidies are too risky for guaranteed returns on large-scale investment in wind energy.
Coombs, Jeffrey J., "The effect of government subsidies and tax credits on the economic viability of wind energy development in the United States" (2010). Honors Theses. 1116.