Climate at a Glance: Subsidies

Illustration by Anthony Watts. Image licensed from pexels.com.

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Bullet-Point Summary:

  • Fossil fuels and conventional energy receive almost no federal subsidies.
  • Wind power by itself receives more subsidies than all conventional energy sources combined.
  • Solar power by itself receives more subsidies than all conventional energy sources combined.
  • Wind and solar power receive additional hidden subsidies by:
    • imposing the inefficiency costs of its unpredictable generation on conventional, baseline power sources.
    • requiring the construction of new, lengthy, expensive power lines.
    • not paying for energy production on government-owned lands like conventional energy does.
    • being the beneficiaries of renewable power mandates that force consumers to purchase wind and solar power.

Short Summary: Climate alarmists often assert that wind and solar subsidies are necessary to level the playing field regarding fossil fuel subsidies. However, as shown in Figure 1, below, the U.S. Energy Information Administration (EIA) reports that wind and solar power each receive more federal subsidies than all conventional energy sources combined. Indirect subsidies add to the imbalance, as wind and solar get widespread access to free production on federal lands, require lengthy and expensive transmission lines but don’t have to pay for them, benefit from renewable power mandates, and impose extra burdens and costs on baseload conventional energy due to the unpredictability of wind and solar power.

Wind and solar power advocates sometimes try to counter (without documentation) that conventional energy has historically received disproportionate subsidies. 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 long-ago claimed favoritism during the 1950s.

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

Figure 1: Wind and solar power 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, Tables 3 and 4, https://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf.


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