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Beyond tax credits and subsidies

Wind power in both Europe and America is moving towards a new non-subsidised era as its cost goes down, as the economic and environmental benefits of embedded (distributed) generation are recognised in market structures, and as the costs of pollution from fossil fuel fired plant are accounted for in fiscal policies. It is early days, however, and wind needs help to find its feet in competitive markets still in the process of reform. Subsidy systems which have strongly stimulated wind development, such as the US production tax credit (page 18) and subsidised payments for wind in Europe, should only be phased out once electricity markets are fully geared towards clean power production.

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