How do solar incentives compare to other energy source subsidies?


Government incentives and subsidies, specifically at the federal level, are crucial to bringing any new source of energy to commercialization and allowing it to compete in the marketplace. Historically, the vast majority of government subsidies have gone to fossil fuels and nuclear power, which not coincidentally generate a large percentage of the electricity used today.

The US tax code provides permanent provisions that benefit some energy technologies, like nuclear and natural gas, even after they have fully matured. The nuclear industry, for example, received about $3.5 billion (in 2010 dollars) per year from 1947-1999, while renewables received about a tenth of that, or $0.37 billion per year (in 2010 dollars), on average from 1994-2009.

In recent years, renewables have received more support each year, but great uncertainty surrounds these incentives since they have been short-term and unable to provide investors and industry a long-term signal of support.

Photo by Stefano Paltera