Climate at a Glance: Energy Subsidies

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Key Takeaways:

Short Summary:

Climate activists often assert that fossil-fuel companies benefit from massive federal subsidies, so to level the playing field, wind and solar subsidies are necessary. However, the U.S. Energy Information Administration reports that the wind and solar industries each receive more federal subsidies than all conventional energy sources combined.1 (See
Figure 1.)

Further, indirect subsidies add to the imbalance. Wind and solar businesses often get widespread access to free production on federal lands. They also require lengthy and expensive transmission lines, but typically don’t pay
for them. Wind and solar also benefit from renewable power mandates, which force consumers in 29 states to
purchase a set amount of electricity from “renewable” sources. Wind and solar energy sources further impose
extra burdens and costs on baseload conventional energy due to the unpredictability of wind and solar power.

In response to these facts, wind and solar power advocates try to counter—often without documentation—by
asserting that conventional energy has historically received disproportionate subsidies from the federal government.
Even if that were true, two wrongs don’t make a right, and consumers should not have to pay higher taxes today to balance out subsidies from, say, the 1950s.

Figure 1. Wind and Solar Power Subsidies in Fiscal Years 2010, 2013, and 2016

Figure 1. This table shows that the wind and solar power industries each receive more subsidies than all conventional energy sources combined. Source: U.S. Energy Information Administration, “Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2016,” Independent Statistics and Analysis, Tables 3 and 4, April 2018, https://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf

Click to enlarge the table. Note the “Renewables” section.

References:

  1. U.S. Energy Information Administration, “Direct Federal Financial Interventions and
    Subsidies in Energy in Fiscal Year 2016,” Independent Statistics and Analysis, Table 3, https://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf

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