Policy Documents

Research & Commentary: Subsidies for Renewable Energy in Florida

April 11, 2012

Sometime in the next few days, Florida Gov. Rick Scott will have to decide whether to sign or veto HB 7117, a multipronged renewable energy and conservation bill that provides tax credits for renewable energy technology investment and renewable fuel infrastructure. If signed and implemented, the bill would cost taxpayers $16 million annually. 

Supporters of HB 7117 contend the bill is necessary to support renewable energy programs in the state. Agriculture Commissioner Adam Putnam, a key player in the bill’s passage, argues the tax credits come into play only once a significant investment has been made and energy is already being produced, and he says it would not be a case of government picking winners and losers or choosing between various sources of energy. 

Tea Party groups and others, including The Heartland Institute and Americans for Prosperity, note the tax credits exist only to favor renewable energy over more traditional sources of power generation and are thus an obvious government manipulation of the market. The bill uses general fund revenue to redistribute taxpayer funds to profit-making corporations, some of which could receive million-dollar payouts for actions they have already taken. Those funds would be in addition to existing state and federal programs that already uniquely support renewable energy deployment and would further burden individuals with the higher costs of expensive and intermittent power generation. 

The Florida Renewable Energy Producers Association also opposes the bill because “it only encourages participation in the renewable energy market for a few existing industries and does not provide for a comprehensive state energy policy.” Although the Florida REPA supports the bill’s tax credits, it contends the bill does not go far enough. 

The following resources provide additional information about HB 7117 and renewable energy. 

The Florida GOP Loves Solyndra, and Expensive Energy
http://www.forbes.com/sites/jamestaylor/2012/03/21/the-florida-gop-loves-solyndra-and-expensive-energy/
James M. Taylor, The Heartland Institute’s senior fellow for environmental policy, writes about Florida HB 7117 at Forbes.com, arguing the new bill allows the government to choose winners and losers in the energy industry and will likely lead to higher electricity prices for Florida consumers. 

Governor, Energy Bill: Put Power in Florida’s Economy
http://www.theledger.com/article/20120408/EDIT01/120409446?p=1&tc=pg
The Lakeland Ledger editorial board expresses its support for HB 7117 and urges Florida Gov. Rick Scott to ignore the concerns voiced by Tea Party groups. The editorial says the bill is especially important for Florida’s economy in ensuring access to plentiful and affordable energy. 

Wind and Solar Power, Part I: Uncooperative Reality
http://www.aei.org/outlook/energy-and-the-environment/alternative-energy/wind-and-solar-power-part-i-uncooperative-reality/
In the first installment of the American Enterprise Institute’s three-part series on the economic outlook of wind and solar power generation, visiting fellow Benjamin Zycher writes, “alternative energy sources will not go mainstream so long as barriers such as high associated costs for land, capital, transmission, and backup capacity persist.” The subsequent installments (available at the link above) deal with the rationale for supporting renewable energy through government programs and the nature of political support for renewable energy at the state and federal level. 

Balancing Fiscal, Energy, and Environmental Concerns: Analyzing the Policy Options for California’s Energy and Economic Future
http://heartland.org/policy-documents/balancing-fiscal-energy-and-environmental-concerns-analyzing-policy-options-califor
Tim Considine, professor of energy economics at University of Wyoming, modeled several economic development scenarios under certain public policy conditions and concludes the state’s renewable energy portfolio will have a net negative effect on job creation. Considine writes, “Any economic benefits derived from building renewable energy facilities in the short run are more than offset by losses in economic output and employment as consumers struggle to pay for these facilities in the long run.” 

Costs and Consequences: America’s Misguided Energy Policies
http://heartland.org/policy-documents/costs-and-consequences-americas-misguided-energy-policies
Mario Loyola of the Texas Public Policy Foundation examines the U.S. government’s energy policy in light of its impact on the cost, availability, and reliability of our energy resources and its broader impact on the U.S. economy. 

Targeted Tax Credits: Neither Conservative nor Free Market
http://blog.heritage.org/2012/02/16/targeted-tax-credits-neither-conservative-nor-free-market/
Nicolas Loris, a policy analyst at The Heritage Foundation’s Roe Institute for Economic Policy Studies, writes about targeted tax credits for energy and their incompatibility with the free market. Loris argues removing the targeted tax credits for all energy sources and broadly lowering the tax rate would “create a more market-based energy economy that benefits the economically viable producers and, ultimately, consumers.” 

Groups Calling for Veto of Energy Bill for Different Reasons
http://www.thefloridacurrent.com/article.cfm?id=27127740
Writing in the Florida Current, Bruce Ritchie reports on opposition to HB 7117. Free-market groups such as Americans for Prosperity and renewable energy groups including the Florida Renewable Energy Producers Association oppose the bill, but for different reasons. Free-market groups oppose it because it would override consumers’ energy choices, and renewable energy groups support the tax credits idea but oppose the bill because they want more providers included in the subsidy scheme. 

The Myth of Renewable Energy
http://thebulletin.org/web-edition/columnists/dawn-stover/the-myth-of-renewable-energy
Competing ideas of what should constitute renewable energy led science writer Dawn Stover to conclude that even those types of generation traditionally viewed as “renewable” still have impacts on finite resources such as raw materials and real estate. Stover writes, “We haven’t discovered any form of energy that is completely clean and recyclable, and the notion that such an energy source can ever be found is a mirage.”