Prepare for the mini-cliffs: Wind and dairy on the brink
For the umpteenth day in a row rhetoric and speculation about the fiscal cliff dominated the news cycle. No one knows exactly what will happen if this unholy marriage of tax hikes and spending cuts takes effect, but a few industries are facing their own mini-cliffs and it's easier to predict the aftermath.
First, there's what might be called the windy cliff. In 1992 the government created a production tax credit to incentivize the use of clean, domestic wind power. The subsidy is a 2.2 cent credit per kilowatt hour of energy produced over ten years, amounting to about $1 million per large turbine. Since the initial credit was enacted, it has been renewed seven times and has been allowed to expire three times.
The tax credit expires for the fourth time at midnight tonight. That's too bad for fans of clean domestic power since this tax credit works. It has been in place since 2004 and U.S. wind generating capacity increased almost six-fold between 2006 and 2011 and now accounts for about three percent of electricity generation nationwide.