Questions Over Subsidies

The huge Shepherds Flat wind farm raises big questions about state, federal subsidies[191], reported the Oregonian in a three part investigative report, beginning on Mar 13, 2011.

Proposed Shepard's Flat Wind Farm; graphic from BPA.

According to The Oregonian[192], green energy subsidies has been treated like a state-sponsored ATM machine.

The Shepherds Flat wind farm[193] (BPA docs[194]), which may be the world’s largest wind farm when it’s completed in a couple of years, shows how Oregon provides millions of dollars to projects that would probably go forward without state subsidies, says the Oregonian.

The Department of Energy claims subsidies are essential to kick start home-grown sustainable power while the state of Oregon claims large subsidized projects can create a “hub”, attracting many smaller supporting industries that will improve our economic outlook. The U.S. DOE announced a $1.3 billion loan guarantee[195], in Dec, 2010, to support Shepard’s Flat.

It’s a loan from the DOE, not a subsidy. That’s an important difference, and never made clear in the Oregonian stories, advocates of wind power[196] say.

Similar kinds of incentives were made for SoloPower[197], a solar panel startup. That company was granted a $197 million loan guarantee by the DOE[198]. SoloPower said they would invest up to $340 million and bring as many as 500 jobs. They received a $20 million loan from the State, and declared bankrupcy less than a year after opening. Solexant planned to build a $200 million solar module manufacturing plant in Gresham that could one day employ 1,000, and got a $25 million loan from the State.

Oregon's tax breaks and subsidies. Source: The Oregonian

The controversial Business Energy Tax Credit system was overhauled by the Oregon Legislature after it came under fire for the size of the incentives and the management of the program. It was reworked in 2012.

There is no question that the State of Oregon IS helping to fund “green” industries with large tax credits. Opinions differ on the advisability of “green” investments.

It’s decidedly a mixed bag. Companies like Tesla have been hugely successful while others have not. Solar World and Vestas have brought new jobs to the area but it’s probably too early to forecast the long term economic impact.

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