January 1, Energy Prices Debate Heats Up Over Subsidy Cuts

Wyatt’s Take

• Renewable energy tax breaks are finally winding down, despite activists warning of higher electric bills
• Experts say real-world data don’t support claims that wind and solar have reduced energy costs overall
• Subsidies for new green energy will linger for years, so any price change won’t happen overnight

The so-called green energy sector can’t stop asking for government handouts. We’ve all seen the headlines claiming wind and solar are the cheapest sources of power, but the truth is, they only survive as long as taxpayers keep footing the bill. Now that the One Big Beautiful Bill Act is rolling back production tax credits for wind and solar over the next decade, eco-groups and their media allies are sounding the alarm, warning electricity prices will shoot up. But the facts just don’t add up.

Go back to 1992, when the Production Tax Credit (PTC) first came along. The idea? Give wind and solar a boost until they could stand on their own two feet. Fast forward to today – those ‘temporary’ subsidies have been extended 11 times. President Biden’s policies even tried tying them permanently to emission reductions that will never get reached. But now, unless you’re already up and running or have started building by next summer, the gravy train’s drying up. There’s still a loophole, though: projects “under construction” can squeak in for another four years of support. So, despite all the bellyaching, these tax breaks aren’t vanishing in a blink.

Not surprisingly, as soon as the new law passed, climate activists cranked out fancy studies predicting energy prices will leap. Why? Because supposedly no more tax-funded windmills means fewer generators coming online, and higher demand means higher costs. We’re told natural gas can’t fill the gap quick enough. Yet energy experts are calling foul, poking holes in these models. Kenny Stein at the Institute of Energy Research says it plain: “If adding wind and solar to the grid is going to reduce electricity rates, as the renewable advocates claim, when will we see it in real-world electricity rates? Or is the real world different from the wind and solar activists’ models?”

Look at the Energy Information Administration’s numbers – retail electricity prices in 2022 rose faster than inflation, and are set to keep climbing for years. The cause? It’s not some sudden subsidy cut. According to Steve Everley with FTI Consulting, the costs are tied to expensive infrastructure spending and efforts to electrify more homes, all pushed by the very same activists demanding renewables. He points out, “Gee, who has been pushing for those massive changes to the electric system, including the shutdown of affordable, baseload power generation? Who has pushed the expensive ratepayer-financed plans for expanding infrastructure needed to replace that generation?”

What’s more, Stein reminds us that the tax handouts will still be rolling out for years. Any wind or solar project coming online by the end of 2027 qualifies. Start construction in the next year, and you might get paid until nearly 2037. So any scare tactics about immediate rate hikes just don’t hold water.

In the end, those activist models predicting big price jumps are just that – models. Real-life evidence from the last two decades shows when wind and solar go up, prices don’t go down. Stein sums it up best: “If wind and solar are such cheap and useful sources of electricity, then the elimination of subsidies should not matter. These sources will be built anyway if the activists’ claims are accurate.”

Wyatt Matters

Middle American families shouldn’t have to subsidize energy fads for coastal elites. We’ve paid enough into these so-called ‘temporary’ programs, and the price of power keeps climbing anyway. It’s time our leaders focus on dependable, affordable American energy – not propping up industries that can’t survive without Washington’s wallet. Working folks deserve honest prices, not more activist wishful thinking.

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