The Federal Production Tax Credit (PTC) was introduced in the Energy Policy Act of 1992 to spark investments in wind and has been renewed many times, most recently in 2009. It provides investors with a tax credit equivalent to 2.2 cents per kilowatt-hour (kWh) produced – or roughly 20-30% of the cost of a wind farm. It is now a budget reduction target for Congress, set to expire on December 31, 2012.

The debate about its extension begs the question: “Can the wind industry survive if the PTC expires?” My answer is: “Yes,” but only if we first get rid of far greater amounts of taxpayer support for more mature energy sectors such as oil, gas and coal.

The rationale being offered by PTC extension opponents is that at $3.5 billion a year, we can’t afford the PTC for the wind industry, because the wind industry has matured enough. But you never hear from those PTC opponents a word about getting rid of the far more costly forms of taxpayer support for the oil, gas and coal industries, expected to receive more than $110 billion in payments over the next decade.

I say this as someone who doesn’t think the PTC is the best way to scale the wind industry (more on that below). But an immediate lapse of the PTC could mean a devastating loss of about 37,000 jobs – or about 50% of the people working in the wind industry. Their collective skills and expertise are a competitive asset that would be a terrible thing to waste. Plus, there are thousands of megawatts of wind projects with utility-signed power purchase agreements that must be renegotiated if the PTC were to expire.

While wind is a mature technology, it still has a long way to go to achieving mature deployment. So, in that respect, the PTC tax credit has already served its purpose to jump-start and create a viable, vibrant, emerging-growth onshore wind energy industry.

However, if the history of subsidies for mature energy sources is our guide, then the PTC should be extended and stay in place. Our subsidies of oil, gas and coal underscore the point that the United States has not typically transitioned mature energy technologies off of government support.

Right now, it is simply not a level playing field in the world of energy finance.

If we were to level the playing field, the wind industry could survive without the Production Tax Credit just fine because the PTC is not the determining factor for its success. Renewable Portfolio Standards (RPS) at the state level are the key driver for wind’s success. Fundamentally, wind energy is driven by diversity requirements designed to keep electricity prices low – RPS requirements in 29 states and the District of Columbia. Impressively, the wind industry is ahead of schedule in almost every state’s RPS requirements.

Going forward, I recommend that the wind industry redirect its lobbying efforts to protect, expand and accelerate RPS programs. Over the long run, it is the best course to increase the demand for onshore wind energy and thus, it could go a long way toward protecting those 37,000 jeopardized jobs.

More importantly, if we do gradually phase out the PTC, the wind industry could benefit from moving away from “tax equity financing.” This is where a profitable company (or high-net worth individual) provides financial backing in exchange for being able to use the wind production tax credits against its tax liabilities for the next ten (10) years.

In the late 1970s, President Jimmy Carter started using this method to incentivize and stimulate investment in good projects in exchange for tax credits.

However, while tax credits have been a popular stimulus tool for investment, there is a limit. In renewable energy, estimates vary, but most believe that $5 billion annually is the upper limit for available tax equity allocated to the electricity space. And, the limit has been reached with $3.5 billion going to wind each year and another $3 billion needed for solar PV next year. It means that “new” technologies that actually need the tax credits are often crowded out of this space because tax-equity investors opt to choose less risky solar and wind projects.

Finding tax equity requires expensive consultants and higher interest rates. In the long run, not having the PTC should allow for lower-cost financing with cheaper wind turbines.

The conclusion here is that while the spotlight is on the PTC, the moment should be used as a firm basis for negotiating a settlement with reasonable leaders at the state level to accelerate RPS standards and reduce the cost of financing. In the end, the goal should be to create a more sustainable onshore wind industry with no reliance on federal tax credits.

Clearly, the fate of the PTC is one of many issues to be discussed at the Renewable Energy Finance Forum-Wall Street on June 19-20th in New York, particularly in the “Overcoming Wind Challenges – Life Without the PTC” session on Wednesday.

So let’s phase out the wind PTC along with oil, gas and coal welfare subsidies. Those opposed to the PTC on cost grounds ought to level the playing field for everyone – starting with taxpayers’ money to industries that long ago stopped needing a handout.

Jigar Shah launched SunEdison in 2003 based upon a business plan he originally developed in 1999 for a university class. That plan became the basis of the SunEdison business model: Simplify solar as a service.

Under Shah’s guidance, SunEdison pioneered the solar power services agreement (SPSA) model, which served as the foundation for much of the growth of the solar industry in the past five years. SunEdison now has more solar energy systems and megawatts under management than any other company. Customers include Public Utilities, Commercial National Accounts, Municipalities, States, and Federal facilities.

Prior to launching SunEdison, Shah managed mergers & acquisitions, corporate strategy, and sales efforts for BP Solar, specializing in national commercial accounts. He also worked as a contractor for the Department of Energy on alternative vehicles and fuel cell programs.

Since its inception in 2009, Shah most recently served as CEO of the Carbon War Room, a non-profit organized founded by British entrepreneur Richard Branson. The Carbon War Room focuses on market-driven solutions to Climate Change, working on removing the barriers that keep solutions from going to scale.

He sits on the boards of the Carbon War Room, Keystone Center, SBNOW, and Greenpeace USA.