The Importance of Understanding the Facts Behind Renewable Energy Subsidies
PFA Environment and Energy Chair Hank Hebel
Finding adequate financing to fund renewable energy and
sustainability can be an extremely difficult task. Often, we depend on initiatives taken by the
federal government to assist in providing those funds to support the
accompanying investment. Subsidies from
the federal government are not a new phenomenon, yet campaign rhetoric can
distort the facts and make things seem as though the government is “picking
winners and losers”. In regards to
energy investment, the government has historically provided subsidies through
tax incentives such as production tax credits (PTCs). PTCs have been extremely important to the
recent rise in wind production; however, these credits for the wind industry
will expire at the end of the year. Some
may respond that an industry must be made to survive on its own without
government support, and while this may be a valid point, it is important to
understand the context of energy subsidization in the U.S. According to a study by DBL Investors, coal,
oil, gas, and nuclear industries have received a cumulative total of $630
billion in a variety of subsidies, such as land grants, R&D write-offs, and
other tax credits, while the renewables industry has received only $50 billion
in government investment. Yet, much of
the subsidization of the coal, oil, gas and nuclear industries is permanently
written into the tax code, while many subsidies for renewable energy are
appropriated on an annual basis.
Therefore, a true discussion about the government “picking winners and
losers” cannot be seriously examined without these facts being fairly
represented.
Check out the DBL study here:
