NCPA - National Center for Policy Analysis

Oregon Seeks to Save Money, Target Energy Incentives

June 27, 2011

Oregon's practice of channeling ever higher sums of taxpayer dollars into big wind farms and other green energy projects appears to be coming to an end in favor of thriftier and more targeted conservation incentives, says the Oregonian.

  • A bill introduced recently in the Oregon Legislature would eliminate the controversial, free-spending Business Energy Tax Credit and replace it with a series of smaller and far more limited tax breaks.
  • If adopted in its current form the bill could save the state hundreds of millions of dollars.
  • It also could signal a broader cultural shift at the Legislature, which has struggled in recent years to trim even the smallest tax breaks.

As written, the bill would stop the practice of subsidizing half the construction cost of wind and solar energy developers, who receive tens of millions of dollars' worth of tax credits.  It also would stop the long-running policy of giving state tax rebates to consumers who buy energy efficient appliances and hybrid cars, and to businesses that replace old lights with modern energy efficient ones.

The bill would not eliminate tax credits for wind, solar, wave and other alternative energy projects that already qualified under the current rules.  As a result, the state is still on the hook for between $100 million and $150 million a year well into the future as those projects are built and the companies use their credits.

In broad terms, the bill allows the Business Energy Tax Credit to expire, but creates three new categories of conservation programs that qualify for tax breaks and puts a lid on how much the state can spend on them.  

  • Spending on energy generation would be capped at $1.5 million a year, vastly lower than the millions currently spent.
  • The other two, conservation and transportation, would be capped at $20 million a year and $10 million a year, respectively.

Source: Harry Esteve, "Oregon Green Energy Tax Breaks Face Sweeping Changes, Cutbacks," Oregonian, June 10, 2011.

For text:


Browse more articles on Environment Issues