Budget & Tax

Cost Avoidance #2-4: Cut cronyism for wind companies

September 27, 2017

Trent England

#2, 3, 4) Cut Cronyism for Wind Companies: Cap payouts and repeal their sales tax exemption Capping annual payouts of the Zero-Emission Tax Credit and the ad valorem reimbursement for wind energy companies at $12.5 million each, and repealing the sales tax exemption for wind turbines, could save more than $72 million in the current budget year and more in future years. The legislature has made some progress unwinding this cronyism, as we noted in May.

A law signed recently by Gov. Mary Fallin will end Oklahoma’s zero emissions tax credit for the wind industry on July 1, 2017. House Bill 2298, by House Speaker Charles McCall and Senate President Pro Tempore Mike Schulz, accelerates the sunset for new zero emission tax credits for wind energy, ensuring no new projects after July 1 will qualify.

This is good news for Oklahomans. HB 2298 will save taxpayers hundreds of millions of dollars. The tax credit was designed to incentivize the wind industry in Oklahoma, but it quickly grew into a massive drain on our state’s budget by allowing foreign and out-of-state wind developers to cash in at the expense of Oklahoma taxpayers. 

When Gov. Frank Keating signed legislation in 2001 creating the tax credit for wind energy, it was believed the credit would cost the state less than $2 million annually. In 2014, however, the wind industry claimed $113 million in wind tax credits for production. That’s more than a 5,000 percent increase!


While Oklahomans work hard to make ends meet, wind energy companies continue enjoying lucrative subsidies and tax breaks at the expense of taxpayers. The sunset for zero emission tax credits is a great first step, but now taxpayers need to see greater steps from lawmakers. Oklahoma simply can’t afford to keep subsidizing the already prosperous wind industry.

Click here for OCPA's entire list of budget recommendations.