Dr. Conca reports that on a total dollar basis, wind has received the greatest amount of federal subsidies. Solar is second. Wind and solar together get more than all other energy sources combined. However, based on production (subsidies per kWh of electricity produced), solar energy, has gotten over ten times the subsidies of all other forms of energy sources combined, including wind. According to the Energy Information Administration (EIA) and the University of Texas, from 2010 through 2013, federal renewable energy subsidies increased by 54%, from $8.6 billion to $13.2 billion, despite the fact that total federal energy subsidies declined by 23%, from $38 billion to $29 billion. Subsidies then decreased dramatically from 2013 to 2016, because:
1. tax incentives expired for biofuels,
2. the American Recovery and Reinvestment Act (ARRA) stimulus funds were used up,
3. energy assistance funds decreased,
4. there was a 15% decrease in fossil fuel subsidies from $4.0 billion to $3.4 billion, and
5. a 12% decrease in nuclear subsidies from $1.9 billion to $1.7 billion.
But the subsidies for nuclear and fossil fuels are indirect subsidies like decommissioning and insurance assistance, leasing of federal lands, and other externalities, unlike the subsidies for renewables which are directly for the production of electricity and directly affect cost and pricing. Within the renewables, electricity-related subsidies increased more than 50% for wind and solar, whereas conservation, end-use, and biofuel subsidies deceased more than 50%. This is unfortunate since conservation and efficiency usually yield great results with little cost or infrastructure requirements. The Institute for Energy Research and the University of Texas calculated the subsidies per unit of energy produced, or cents per kWh. This is a more relevant number for comparing different energy sources as it normalizes to the amount of energy produced.
Original URL: https://www.forbes.com/sites/jamesconca/2017/05/30/why-do-federal-subsidies-make-renewable-energy-so-costly/#20aa9052128c
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