A Thought On Subsidies (Reader Comment)

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Anti-wind and anti-solar folks (yes, there are a few out there — mostly tied to the fossil fuel industry) love to bring up renewable energy subsidies. However, there are so many reasons why they really shouldn’t be eager to do so. For example, fossil fuel and nuclear subsidies dwarf renewable energy subsidies.

historical energy subsidies nuclear oil renewable energy

energy subsidies
Subsidies in first 15 years of subsidies for various energy sources.

Additionally, many indirect subsidies never even get counted in most subsidy analyses — such as the tremendous extent to which we subsidize oil through our military and the tremendous health externalities not included in the price of fossil fuels (neither of which are included in the price of fossil fuels).

But there’s another point which gets even less attention. Here’s a reader comment that I thought was worth a repost:

Yes, we have supported oil, wind and solar with subsidies. Look how that’s played out.

Wind, 30 years ago, produced electricity at $0.38/kWh. Now it’s producing at $0.04/kWh to $0.06/kWh and on its way down to $0.03/kWh in the near future. (Already, we’ve seen a 9.5x drop.)

Solar panels, 30-40 years ago, cost as much as $100/watt. Solar panels are now being manufactured for prices approaching $0.50/watt.  (That’s almost a 200x price drop.)

Oil, in 1946, was $18.89 a barrel (2012/current dollars) and in 2012 it’s running about $100 a barrel. (More than a 5x increase.)

Support for oil might have kept prices from rising further, but it has not made oil cheaper.

Support for wind and solar have made them much cheaper. Our investments are returning massive dividends.

Wind has gone down to 1/6th its early price, solar to 1/100th, and oil has risen by more than 5x. Exactly how has that oil subsidy worked out for us?

Image Credits: Climate Progress


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Zachary Shahan

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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