An incentive used to be something that promoted business development, but was just a single factor in a company’s decision to invest or expand, a tiebreaker when all other things were equal. But apparently even those committed to the idea of the free market have grown dependent on handouts from Uncle Sam.
E.ON Climate & Renewables has started the first phase of its multi-county Wildcat Wind Farm project in Madison and Tipton counties, but plans for future phases, including one in Grant County, supposedly depend on the extension of federal tax breaks for wind farms.
The credit is for 2.2-cents per-kilowatt-hour of energy production from wind turbines and is set to expire at the end of this year. If it is not renewed for 2013, E.ON officials cast serious doubt that the Grant County portion of the project would get underway by September 2013 — and if that date passes who knows when or if the project will be resuscitated.
That is the problem and limitation with government incentives. When every city and state is so desperate to entice businesses to locate in this region, work on that project or develop some new technology, such provisions as tax breaks or TIF districts become baseline requirements for companies rather than a single factor to consider.
If a business move doesn’t make sense without a government subsidy then we must ask how good an investment such an enterprise is for the taxpayers.
Businesses allowed to build on shifting sand and empty air and are too often insulated from reality until failure results. There is no reason to think E.ON is in such a position now — the fact that they won’t build here unless the effort makes economic sense is actually a good sign. But the idea that the only way windmills in Grant County make sense is if what would normally be tax dollars start flowing to the developer creates the sense that the market won’t support them.
If the market won’t support this, then what are the long-term ramifications of building them?
We remain hopeful and excited about the potential of wind farms in Grant County, but we’d prefer to see the project evaluated on its own merits, rather than whether Congress can get its act together long enough to extend a tax cut. At the end of the day, most of these incentives come from our pockets.