It’s Time to End Wind and Solar’s Free Ride on Federal Lands

“Finish him” - Trump to Burgum regarding wind and solar special treatment, maybe?

On Tuesday, July 29th, the U.S. Department of the Interior Secretary Doug Burgum announced the agency would be “curbing preferential treatment for unreliable, subsidy-dependent wind and solar energy.” The One Big Beautiful Bill Act starts to roll back the Inflation Reduction Act’s (IRA) lavish financial incentives, but wind and solar are still getting a free ride on federal lands.

Here is one suggestion for the Interior Department: require renewables projects to pay a federal royalty that is shared with the states, just like oil, natural gas, and coal.

There has long been unequal tax treatment of energy development on federal lands. In fact, the IRA raised royalty rates on oil and gas produced on federal land by at least 33 percent, but it left electricity produced by wind and solar entirely untaxed, effectively giving renewables a free ride on federal lands. If DOI wants to end the preferential treatment of wind and solar, it can levy a federal royalty on all energy resources.

Coal, oil, and natural gas produced on federal land are subject to royalties, a tax which takes between 12.5 percent and 18.75 percent of the natural resources’ taxable value. These royalties generated $12.8 billion in revenues for American taxpayers in 2024, and these revenues are typically shared fifty-fifty with the states, ensuring locals share in the financial benefits from natural resource development in their backyards. These revenue-sharing agreements provide important revenue streams for Western states where the federal government is a large landowner.

Take Wyoming, a state where 48 percent of the land is owned and managed by the federal government. Always On Energy Research and the Wyoming Liberty Group determined that wind and solar projects contribute much less in tax revenues on an energy equivalent basis than oil, natural gas, and coal.

Wyoming levies a state tax of just $1 per megawatt-hour (MWh) of electricity produced by wind turbines built on privately owned lands, and solar generation is not taxed at all. Oil pays nearly $11.72 per MWh in federal and state taxes, while natural gas pays nearly $3.72 per MWh, and coal $1.71 per MWh.

Over the next five years, Wyoming’s wind capacity is expected to double. Unsurprisingly, wind developers are seeking to build 60 percent of these projects on federal lands because it allows them to avoid paying Wyoming’s $1 per