Like the Jeopardy! game show, green energy subsidies have been Congress’ answer to every energy policy question. The first OPEC oil embargo of 1973-74 catalyzed decades of energy policy, including the formation of the Department of Energy. Wind, solar, and hydropower subsidies began in earnest with the Public Utilities Regulatory Policy Act of 1978. Similarly, subsidies for corn-based ethanol were enacted as part of the National Energy Conservation Policy Act of 1978. Both were designed to reduce the country’s dependence on Middle East oil.
The PURPA subsidies set off a race by independent developers to construct small generating plants whose output electric utilities were required to purchase at administratively set prices. In some cases, the subsidies were independent of how much electricity the plants actually produced, creating the moniker “PURPA machines,” because their real purpose was to extract subsidies; producing electricity was secondary.
The Energy Policy Act of 1992 modified those subsidies, creating a “temporary” production tax credit for wind power and certain types of biomass generation. Congress also enacted an Investment Tax Credit, initially for solar energy, but later extended to all renewables, which could choose between the ITC and the PTC. Although the PTC was supposed to expire in 1999, it has been repeatedly extended and expanded, most recently in the Inflation Reduction Act. The PTC now includes all zero-emissions generation, including new nuclear plants. Under the IRA, the ITC has been increased, with qualifying green energy investments able to claim a credit of as much as 60% of their construction cost.
Moreover, the IRA extends the PTC and ITC until greenhouse gas emissions from electric generation fall to just 25% of their 2005 levels, after which they will be decreased gradually. According to the U.S. Energy Information Administration, the expected date for reaching that goal is 2048.
The IRA also provides subsidies for “green” hydrogen, that is, hydrogen produced from emissions-free electricity, battery storage facilities, and facilities that capture carbon and bury it underground.
Ethanol subsidies have similarly been extended and increased, with the government now subsidizing various types of biofuels and numerous states enacting clean fuel standards, which, like renewable portfolio standards, require increasing percentages of transportation fuels to be biofuels.
Congress has not been the only institution shoveling subsidies to green energy. Many states have provided their own subsidies, especially the mid-Atlantic states that are forcing ratepayers to purchase electricity from offshore wind projects at prices many times higher than the market.. States have also enacted renewable portfolio standards forcing electric utilities to increasing percentages of electricity from renewable sources that would otherwise never be built.
This subsidy smorgasbord is supposed to reduce greenhouse gas emissions by promoting new clean energy technologies. It’s also supposed to accelerate economic growth by creating new “green” industries and high-paying jobs.
There is little evidence for the former. U.S. energy-related greenhouse gas emissions have decreased by almost 20% from 2005 levels primarily because natural gas has supplanted coal as the primary fuel for generating electricity. Between 2005 and 2023, electricity generation from natural gas was six times greater than generation from wind and solar combined. In 2023 alone, electricity generated using natural gas was three times greater than wind and solar generation.
Moreover, growth in subsidized wind and solar generation has distorted wholesale electric markets, begetting the need for subsidies to ensure existing nuclear plants continue operating, lest their owners shutter them and eliminate thousands of high-paying jobs. Enacting subsidies required to offset the distortions caused by other subsidies is surely one definition of economic insanity.
As for spurring new industries and economic growth, today, the U.S. solar manufacturing industry is moribund, with almost 90% of the solar panels installed in this country now produced in China. All but one of the offshore wind projects under construction or slated to be built are owned by European companies that their respective governments control.
The economic costs of these subsidies are borne by taxpayers, who must finance the additional deficit spending; electric ratepayers who, despite claims that renewable energy resources are less costly than traditional generating resources, have seen their electric rates soar; and drivers, who pay more for gasoline and diesel fuel as refineries have closed or been modified to produce subsidized biofuels.
Those higher costs for electricity and transportation fuels raise the costs of producing and distributing almost everything else, which ripples through the entire economy, reducing economic growth and destroying jobs.
As for green energy subsidies spurring the development of new, lower-cost clean technologies, there is nothing new about wind and solar generation that receives the lion’s share of subsidies. After almost half a century, neither are cost-competitive, especially when the additional costs of addressing their inherent intermittency are included—costs that others must pay. And new technologies, such as direct air capture of carbon, will only be commercially viable if the U.S. imposes carbon taxes of several hundred dollars per ton, which few politicians will be willing to do.
The overwhelming majority of green energy subsidies reward politically powerful constituencies and businesses whose primary purpose is not to build better energy mousetraps but to build only ones that qualify for the largest subsidies.
The government could instead target subsidies solely on true research and development efforts of new clean energy technologies, such as advanced and small modular nuclear reactors.
With the country deeply in debt, wasting hundreds of billions of dollars on subsidies for green energy, as the Inflation Reduction Act calls for, is an idea whose time is long past. Green energy Jeopardy! may be a lucrative game for the lucky recipients, but eventually everyone loses.
Jonathan Lesser is a senior fellow with the National Center for Energy Analytics and the president of Continental Economics.
This article was originally published by RealClearEnergy and made available via RealClearWire.
For those receiving them – yes.
The subsidies are absolutely necessary. Without them there would be no Subsidy Farms then all the little subsidies would feel lonely, unwanted and unincluded
Concur – For the sale of EV’s and other products with subsidies for the purchase, the subsidies artificially shift the demand curve such that the seller is able to raise the sales price. In substance, the subsidy to the buyer results in most all of the buyers subsidy ending up in the sellers pocket. (supply and demand curves/micro economics)
Depressing in the extreme 😣
They work perfectly – to enrich ‘green’ scammers everywhere.
Story tip: https://www.breitbart.com/europe/2024/09/04/nothing-new-under-the-sun-sail-powered-cargo-returns-to-atlantic/
Interesting. The transit times for sail powered cargo ships is comparable to motor powered ships.
How often the sail boat engines are needed due to lack of wind is not discussed.
Also not explained are any additional complexities of docking, although the motors probably deal with that as a guess.
I find it hard to believe that the transit times would be comparable.
So, I guess the next step is sailplanes.
Oh.
Wait.
We have them already.
Gliders.
But they have limited passenger and virtually no cargo capacity and depend on finding heat created thermal updrafts to extend the range. No crossing the Atlantic with those birds.
Maybe someone will install PV cells on the wings and an electric motor.
Oops.
No flying at night.
No flying with overcast skies.
Back to the drawing board.
Maybe I can get a government subsidy to study this?
(is a /s needed?)
(is a /s needed?) See Poe’s Law
I did not think I met the extreme provision of that law.
Solar Impulse II managed it though with only the pilots and limited cargo
The plane’s journey began in Abu Dhabi and ended there on July 26, 2016 after covering a distance of approximately 26,000 miles (42,000 kilometers). The flight took over 16 months to complete
Not that it’s anything more than a sit in toy with no real value to society … which it is and it doesn’t
Same could have been said about the wright flyer.
Did you read about the race between a 1913 Ford T and a 2013 Tesla S?
The start line was the Ford Piquette Plant in Detroit and the finish line was the Nicola Tesla Museum on long island.
https://www.caranddriver.com/features/a15112705/2013-tesla-model-s-vs-1915-ford-model-t-race-of-the-centuries-feature/
The Tesla pulled in at 7:25 am the next day and won by 65 minutes.
The Model T crossed the finish at 8:35 am but lost over 2 hours during the journey from stopping to make repairs to the century old car
Perhaps but we won’t be given a century to upgrade a suitable replacement for ICVs. And society doesn’t like taking huge steps backwards
The problem with your Wright Flyer analogy is that until well after 1903 at Kitty Hawk, nothing else worked so nothing better was available.
Today there is something far better than Impulse II … The Boeing 747 can circle the globe in less than 36 hours (with refueling time) while transporting 400-660 passengers and carrying 270,000lbs of cargo.
Airships could fly longer distances with higher payload. What they had was the novelity of heavier than air-flight.
And visionaries that could see the potential.
But, the Hindenburg was still limited to 74 knots, could only carry 9400kg including 36 passengers and 61 crew. And still took 2.5 days to travel 3800 miles.
Then there is that whole immolation thing…like some EVs…we all know how that story ended
Yet even that can’t compare to a 747 now can it?
Thanks for the memory. I had forgotten about that bird.
giant rubber bands? 🙂
One thing the article does not address is the needed generator. Running lights, computer control or the sails, etc.
Obvious problem, because it’s only a 1,000 ton cargo, every time they use the engine it’s far less efficient than a modern cargo ship carrying tens if not hundreds of thousands of tons, so anything they gain under sail is lost (and then some) when it’s under power.
Also crewing costs, likely similar to a 100,000 ton vessel, but carrying 1% of the cargo, so overall 100 times more expensive.
In fact, for a cargo that size, it might be cheaper to simply fly it on a 747.
Your speculation on crew size, while likely in the ball park, is a best guess estimate.
When they can’t say how often and for how long they had to use the motor, that’s the least of our problems.
Edit:
I looked it up.
Smaller ships might be crewed by as few as 8, larger ones as many as 30, however the weight might max out at 400,000 tons, so actually even fewer per 1,000 tons.
So, Department of Energy along with wind, solar, and hydropower subsidies are the response to the 1973-74 oil embargo with the intent of weening the country off OPEC oil.
In the intervening years the subsidies increased time and time again, but for the independent developers,
“…real purpose was to extract subsidies; producing electricity was secondary…”
Sound about right. Except “secondary” might be less.
“Enacting subsidies required to offset the distortions caused by other subsidies is surely one definition of economic insanity.”
Yup. Spot on.
Plus the year-round Daylight Savings Time was supposed to save heating energy.
And everyone’s fav, the national 55 mph highway speed limit, which gave rise to widespread use of CB radios and radar detectors through the ’70s.
Work? Of course they do, as several comments have already noted. The greenies get my money, and that works for them, not so much for me.
It also enhances the campaign funds of those bureaucrats and politicians who give my money to the greenies, because not only does some of it come back as campaign “donations”, all those greenies campaign for their benefactors and vote for them.
…. and it pays the salaries and overinflated expense accounts for the blowhards who do essentially nothing except to pretend to direct traffic while overinflating their expense accounts. The taxation industry has been with humanity since before we developed language. That’s as far as progressives have progressed, and why some refer to them as parasites.
China really invested in renewables, and now they dominate one of the most important future industries. Germany could have gotten a huge share of the PV industry in the early 2000s. But keeping the fossil fuel lobbyists happy was more important.
https://www.nature.com/articles/s41467-023-41971-7#Sec6
But don’t worry, in a few years you can complain about china dominating EVs too, while western legacy car makers stand in line for government handouts to be saved.
At least the IRA is improving things.
https://esgnews.com/clean-energy-jobs-surge-doubling-u-s-employment-growth-in-2023/
https://www.neimagazine.com/news/nuscale-faces-investor-fraud-investigation/
Scams, scams all around.
Those “costs” are fantasy.
I don’t support SMRs
You do not support sane economics.
Poor little child.
Absent FF’s nuclear is the ONLY way to get constant reliable power.
Did you know that your whole pitiful existence relies totally on FOSSIL FUELS.
… and there is absolutely NOTHING you can do about it. 🙂
MUN, I give you credit for coming here and bringing references to throw out to the denizens of this site. You clearly love poking the bear and stirring up a vitriolic response among some of the more easily-baited. If only the Green websites offered the same respect to opposing views, we might have something approaching an exchange of ideas.
Be that as it may, you are more than a little disingenuous. Look at the illustration you provided. In less than 3 years, solar is going to be the cheapest source of energy everywhere in the world? In the higher latitudes, where there’s almost no sun in the winter, and in the summer gets sun at low angles? The amount of battery capacity needed for 6 months of little or no sun would be phenomenal, and I suspect you know it.
The problem of intermittency, requiring battery or other expensive storage as backup, is a readily apparent cost that has to be figured into your calculations of what is “cheapest”. If you have someone who has seriously considered the amount of backup and its cost, please provide that. Until you’re prepared to be serious about costs, you’ll still be able to excite a reaction here, which you’ll enjoy, but you won’t gain much traction with those who are genuinely interested in discussing what is happening in the world of energy and climate.
If you follow the link below the image you will see they included battery storage costs in their calculation.
I looked at the link. The study report was a bit of a word salad, but the battery storage costs were all modeled and were adjusted using a learning algorithm. There really isn’t a need to guess much about future costs, when you are looking at a date less than 3 years in the future. You already know what battery costs are now (very high, if even available), and they aren’t going to change significantly in 2 years. The modeling is simply a way of hiding the authors’ attempts to drive down anticipated costs until they hit the desired target.
When it comes to baiting MUN is the Master
Baiting with reality, now that is a strange concept. All I do is bring some sanity in energy discussions on this site. From sources not approved by exxon and koch.
not bating .. You are just making mindless anti-science and anti-economic whimpering sounds.
You do realise the incredible amount of FOSSIL FUELS needed to mine and build those solar factories and batteries.
And the incredible amounts of mining that has to be done.. far more than now.
Or haven’t you been paying any attention to anything except your warped little mirror.
Huh? Why the map graphic? Solar in far Northern Canada? Isn’t Greenland primarily hydro powered? I love data-as-a-post but that data looks too sloppily arranged.
It’s total BS, the western most province in Canada, British Columbia, only has one small wind installation on the northern tip of Vancouver Island. There is virtually no solar other than small home based installations. 85% of BC’s electricity comes from hydro, the remainder from fossil fuels. Source BC Hydro Corporation. If Nature has that wrong what else is wrong, other than MUN, I mean.
China dominates the EV !market already…with cheap crappy cars that travel no more than 38k (25m) on a charge and travel at a top speed of 17-24mph at a cost of $2-3000 each. Oh, and they have more than 21,000 EV fires yearly or 58+ EV fires daily. They also lead in EV scooters (electric bikes) with more than 350M which also self immolate on a regular basis weather charging, parked or being ridden at the time.
The great thing about comments by Useless is that I don’t have to read them to know they are already BS.
Just push the red button and scroll on.
Tell us little twerp. what does somewhere like Australia use for electricity at night ??
Of course solar will be cheap.. but you won’t have any.
ROFLMAO.
From the Exeter Uni school of paid propaganda. Hilarious. 🙂
Not one thing in the report is real. !
All just agenda-driven assumption and ignorance-driven models.
Only someone with a deeply brain-washed single brain cell could possibly fall for such arrant rubbish.
They are not “renewable”. You actually mean weather dependent generators. They invested in them because they had lots of moronic governments in the developed world subsidising all the associated junk.
None of the existing wind turbines or solar panels will be replaced. They will just end up as collapsed, corroding metal litter or end up in land fill so the land can be repurposed for more valuable production. The offshore turbines will become artificial reefs as they collapse.
China invested a lot more in improving coal mining productivity and coal fired power stations to make the junk that the developed world wanted.
China is now the leader in coal power construction and technology development.
https://www.npr.org/2023/03/02/1160441919/china-is-building-six-times-more-new-coal-plants-than-other-countries-report-fin
When you can supply the data for your off-grid electricity supply system you will be relevant. Otherwise you are pedalling nonsense.
By your reckoning, all of the red areas will look like this with no space for anything else:
Is that a Panda? Must be somewhere in China
If the government controls our energy policy are you feeling comfortable and safe. Government has too many conflicting policy objectives only one of which is to assure energy supplies are safe and abundant. For example lining their own pockets and using available funds for other reasons..
In the old days, candidates and their parties established “platforms” before elections. The candidates actually described these “platforms” in 1st person, then wrote the words in clear language.
Ah the good old days of clear policy positions and honest elections.
The overwhelming majority of green energy subsidies reward politically powerful constituencies and businesses whose primary purpose is not to build better energy mousetraps but to build only ones that qualify for the largest subsidies.
Sounds a lot like the definition of oligarch
“one of a class of individuals who through private acquisition of state assets amassed great wealth that is stored especially in foreign accounts and properties and who typically maintain close links to the highest government circles”
Does not sound like a capitalist
“a person who has capital especially invested in business”
What about socialism?
“a system or condition of society in which the means of production are owned and controlled by the state”
Subsidies should always be viewed as coercion by the government !
Someone is going to be bludgeoned with taxation so that some rent seeking woke pressure group can be subsidized.
It is always thus and therefore always bad !
No subsidies for anyone or anything ever should be the norm.
“It is error alone which needs the support of government. Truth can stand by itself.”
Thomas Jefferson
Subsidies do not actually make anything “cheaper” but instead move the cost to some other area of the economy in what is little more than a shell game con-job by politicians.
Worse, subsidies normally have the adverse effect of rent collecting of these subsidies by vested interests, which actually increases the real cost to the economy.
I personally prefer market forces as the principal arbiter of how I spend my money rather than some politically motivated zealotry. I dislike having politicians meddle in matters of engineering and economics.
Concur.
A free market, supply and demand economics, is the only pure democracy.
“The overwhelming majority of green energy subsidies reward politically powerful constituencies”
I’d like a list with specific members instead of broad categories like “the green industry” or alternative energy”. Google won’t list me the top 10 subsidy miners.
Lost me at “Jeopardy!”
Like the Jeopardy! game show, green energy subsidies have been Congress’ answer to every energy policy question.
Probably would have been a bit better without that injection of humor.
Throw money at a problem is a government’s gut reaction. Joe Biden and Kamala Harris even throw money at inflation.
All Increased government spending is derived only by increasing debt. Trying to control inflation (which is defined as too many dollars chasing too few goods) by spending more dollars is insanity on parade.
So, if you vote for the people who do that, then you are insane too.
Face facts.
I lost on Jeopardy
The late, great Greg Kihn, who’s song “Our Love’s In Jeopardy” was the subject of this parody is driving the car in the last scene.
Politicians make money thru insider trading in green schemes.
Examples? I remember First Solar, what are other biggies?
Sunpower just went bankrupt.
Solyndra went bankrupt years ago.
Both sucked millions of government grant dollars.
Seems like an ongoing trend.
There is also another part to the green energy fiasco – mission creep by DOE, NASA and NOAA into climate studies based in fraudulent climate models. This started in the 1960s when Manabe’s group at the old US Weather Bureau decided to ‘double dip’ their funding and try to predict CO2 induced climate warming as well as weather. They oversimplified the climate energy transfer processes that determine the surface temperature. When the CO2 concentration was doubled in their 1967 one dimensional radiative convective (1-D RC) model it created a spurious increase in average surface temperature of 2.9 °C (Manabe and Wetherald, 1967, MW67). This became such a lucrative source of funding that the MW67 errors have never been corrected. The climate modelers rapidly became trapped in a web of lies of their own making. The increase in equilibrium surface temperature produced by a CO2 doubling is now known as the equilibrium climate sensitivity (ECS). Any climate model that has an ECS greater than ‘too small to measure’ is by definition fraudulent (Clark, 2024). There is no need to look any deeper into the model configuration or the software code.
As NASA lost funding after the Apollo (moon landing) program ended in 1972, there was mission creep into climate modeling. In 1976, the planetary atmospheres group at NASA Goddard copied the MW67 model and created warming artifacts for 10 ‘minor species’ including CH4 and N2O (Wang et al, 1976). The foundation of pseudoscience of radiative forcings, feedbacks and climate sensitivity was fully established with the 1981 paper by Hansen et al. When the DOE was formed in 1977, it included the Atomic Energy Commission and its network of National Laboratories. As funding was reduced for nuclear programs, especially after the nuclear accident at Three Mile Island in 1979, mission creep started at DOE. Various groups, notably Lawrence Livermore Labs jumped on the climate modeling bandwagon. An important part of the climate fraud at DOE is the Coupled Model Intercomparison Project (CMIP). This is now a major source of the fraudulent climate model results used by the UN Intergovernmental Panel on Climate Change (IPCC) in their Climate Assessment Reports (Hausfather, 2019).
Later, as computer technology improved, the radiative forcings were divided into ‘natural’ and ‘anthropogenic’ or ‘human caused’ contributions. In the Third IPCC Assessment Report in 2001 it was claimed that human caused climate warming led to increase in the frequency and intensity of extreme weather events. This replaced the energy crisis with a climate crisis and led to the Net Zero disaster we have today.
The US Global Change Research Program (USGCRP) was established by Congress in 1990 ‘to coordinate federal research and investments in understanding the forces shaping the global environment, both human and natural, and their impacts on society’. It has failed to fulfill this mission because it has ignored natural climate change. Instead, it has become a US deep state extension of the UN Intergovernmental Panel on Climate Change (IPCC) that only considers human caused climate change. The periodic National Climate Assessment (NCA) Reports that the USGCRP is required to submit to Congress have been copied from the IPCC Climate Assessment Reports. The USGCRP has greenwashed Congress using melodramatic claims of a dangerous greenhouse gas warming based on fraudulent climate model results. The current budget for the USGCRP is around five billion dollars – to create deep state climate propaganda. The climate modelers have become very adept at filling their own pork barrel with tax payer money.
The energy crisis was solved by fracking. It has been replaced by a contrived climate crisis that has been used to drive the insane Net Zero green energy subsidies. In addition to the tax payer money that has been wasted on green energy, don’t forget to add in the additional money that has been wasted on climate modeling for well over 50 years. A good place to start is the five billion dollar budget for the USGCRP provided by congress for climate propaganda.
For more on the climate modeling fraud see the post ‘Understanding the Errors in the Climate Models’.
All of those 1D energy balance models are nothing but cartoons, based only annual and global averages.
Do [Any] Subsidies Work?
Define work?
Put money into Big Green Billionaire pockets for doing nothing of value!
Yes, they do work.
“Do Green Energy Subsidies Work?”
No.
Not only that but they cannot work and will never work because they create backfire and rebound. Read up:
Follow the Science: Biden Climate Policy Is a Fraud
https://www.wsj.com/opinion/follow-the-science-biden-climate-policy-is-a-fraud-new-study-green-subsidy-no-impact-06fd5c00
Most Climate Policies Don’t Work. Here’s What Science Says Does Reduce Emissions.
https://www.wsj.com/science/environment/climate-change-policies-emissions-ai-research-a02b3f59
Energy transitions or additions?: Why a transition from fossil fuels requires more than the growth of renewable energy
https://doi.org/10.1016/j.erss.2019.01.008
Missing carbon reductions? Exploring rebound and backfire effects in UK households
https://doi.org/10.1016/j.enpol.2011.03.058
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” – Ronald Reagan
“More government money will reduce carbon dioxide in the atmosphere.”
So far, the idea hasn’t worked. Its been 30 years now, more than enough time to demonstrate the concept.
Do you have a referenced actual dollar figure to attach to this claim?
For context, the US is 35,280 billions in debt right now.
Solyndra wasn’t an example of how they will fail, and the money and opportunity costs are squandered. No no no. That’s the model of success for these innumerate Fabian socialists. It’s another front of the Cloward-Piven model to destroy the market economy, create a crisis, then they do whatever they want as a “solution.”
Solyndra started as part of GW Bush’s “Solar America Initiative” when it received one of the ten initial contracts of the SAI. A couple years later the Barry Sotero DoE pumped buckets loads of more cash into it.
The problem was that the whole idea was doomed to fail from the start***, people inside the DoE national labs knew it was insane, but the DoE bureaucrats bulled ahead with it regardless.
So yeah, its a great example of subsidy mining.
***Hint: the first clue is contained in the name itself — a contraction of “solar” and “cylinder”.
Very nice Johnathan. Wind, solar and storage are not green, they are not affordable, they are intermittent, they are not long lived, they foul up the grid and they can’t be recycled. They are good for nothing. Fire up all fossil fuel and nuclear generators, build new fossil fuel and nuclear generators, remove all wind and solar from the grid and let’s get on with the business of living.
Once upon a time it was the efficiency improvement an idea made to the greater public that created the desire to have it. Now it is how much money can be extracted from public purses controlled by idiot politicians who have no idea what is good, bad or indifferent that set the trends..
They certainly make the owners of the green businesses rich. Rich enough to donate generously to the campaigns of politicians who support green subsidies.
Fact check: if any technology or venture requires Government provided subsidy in the short term to make it viable, it is not viable at all.
The normal way to capitalise tech or a venture is: investors, bank loan. In order to secure investment or loans needs: business model, budget forecasts, cash-flow forecasts, return on investment schedule. Government subsidy is required when lenders or investors aren’t impressed with the paperwork and won’t take the risk.
Instead, the risk is socialised by Government, whilst any profit is privatised, and the likelihood the tech or venture will fail is inevitable.
We need legislation to prevent use of taxpayers’ money in this way.