It seems every other day in recent months we’ve been reporting on funding and loan guarantees being granted by the U.S. Department Of Energy for renewable energy projects.
The splurge is in part connected with the U.S. Sunshot initiative – an ambitious drive to reduce the cost of solar energy by 75 percent by 2020 and to make the USA the world leader in solar technologies.
The recent spending spree in the U.S. on renewable energy support hasn’t been without its critics; but as has been pointed out repeatedly, fossil fuels and nuclear energy have enjoyed a gravy train of subsidisation for decades.
It’s this subsidisation that has brought us to a point where renewable energy is being called upon to help fix the environmental damage caused by polluting and dangerous energy sources – energy sources still benefiting from subsidisation, propping up the cheap energy era that wasn’t and creating barriers to uptake of renewables.
While the billions being spent and guaranteed for solar power projects seems like an incredible amount of money, how does it stack up against the massive cash injection fossil fuels and nuclear received in their early years?
A report from DBL Investors, a “double bottom line” venture capital firm based in San Francisco, highlights the inequity in support between fossil fuel/nuclear energy and renewables.
The report states that as a percentage, inflation-adjusted federal nuclear subsidies accounted for over 1% of the U.S. federal budget over their first 15 years, and oil and gas subsidies made up half a percent of the total budget. Renewables constituted about a tenth of a percent.
Nuclear spending averaged $3.3 billion (inflation adjusted) annually over the first 15 years of subsidy life, and oil and gas subsidies averaged $1.8 billion, while renewables averaged less than $0.4 billion over their first 15 years (1994 – 2009).
Injections of funding into renewables since 2009 are simply playing catch-up to the government support fossil fuels and nuclear have received; and are still receiving.
“Today, as we seek to move towards a more independent and clean energy future, the truth is that renewables – from a historical perspective – are if anything under-subsidized. This weak support is inconsistent with our nation’s own historical energy narrative”, the report concludes.
The full report, entitled “What Would Jefferson Do? The Historical Role of Federal Subsidies in Shaping America’s Energy Future”, can be viewed here (PDF).
Related:
Solar panel rebates – cost vs. value
