Energy from renewable sources is widely regarded as a means
to reduce greenhouse gas emissions as well as a way to diversify
the portfolio of energy production to mitigate risks from volatile
prices or exogenous shocks. In an effort to increase the amount of
energy produced from renewable sources the Federal Renewable
Electricity Production Tax Credit (PTC) was passed which offered a
fixed tax reduction for each unit of energy produced (e.g. $23/MWh
in the last instantiation of the credit). This type of incentive
mechanism naturally led to an increase in the supply of wind
power for the United States. At a regional level, though, the effect
of the PTC on wind production was quite varied. A large portion of
this variation is due to cost-effectiveness in areas with low average
wind speeds, topographical constraints, or both. Another source