6BIGMO%7E1.pdf
Maybe they are great investments but betting on industries that thrive on the basis of propaganda and government tax breaks and subsidies can also be a bit risky.
Still, I have to admit that the FPL Group (parent of (a) regulated utility Florida Power & Light, and (b) unregulated FPL Energy -- largest US owner of "wind farms") has done well -- heavily due to tax breaks -- as I pointed out in the attached, now somewhat dated, paper. FPL Energy has continued to buy & build "wind farms" since the paper was written.
Interestingly, the 5-year double declining balance depreciation break can be especially attractive to a corporate CEO who is nearing retirement and who enjoys a bonus program that is tied to earnings. A big depreciation deduction (35% of which goes directly to the bottom line) can give earnings a nice temporary boost. Of course the Production Tax Credit also goes to the bottom line.
Glenn Schleede
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