Green Energy Is Going To Be Subsidized FOREVER!
Solyndra was only the beginning. Subsidies to green energy won’t be ending anytime soon, despite news reports that they are more economical than ever, according to a report by the International Energy Agency.
The IEA says that green energy subsidies for sources like wind and solar aren’t just here to stay, they are expected to explode globally. The agency says global subsidies for green energy will nearly double by 2030, growing from $121 billion in 2013 to $230 billion just 17 years later. By 2040 — 25 years from now — world governments will spend a whopping $205 billion subsidizing green energy sources.
In 2013, the U.S. alone spent $15 billion on green energy subsidies, funding major solar and wind energy projects across the country. But the U.S. is expected to spend even more by 2040, becoming a close second to Europe in terms of taxpayer dollars thrown at green energy.
But IEA’s subsidy estimates may underestimate the level of green subsidies. President Obama’s budget currently includes $48 billion in subsidies to green energy, energy efficiency and biofuels over the next ten years.
The budget as it stands is unlikely to be passed by a Republican-controlled Congress, but a deal could be worked out to keep green energy tax subsidies in the budget. For example, Obama could promise to approve the Keystone XL pipeline in exchange for green subsidies.
Free market groups, however, have been pushing Republicans to reject attempts by the Obama administration to make permanent or to extend any green energy subsidies. In particular, groups have targeted the Wind Production Tax Credit — a tax subsidy for wind power producers.
“President Obama may call his proposal a ‘middle-class economics’ budget, but in reality it hurts all Americans, including the middle class and especially the poor,” said Tom Pyle, president of the Institute for Energy Research.
“This budget would increase government spending and raise energy costs on American families,” Pyle said. “For example, permanently extending the costly wind Production Tax Credit would line the pockets of multi-national corporations with taxpayer dollars for years to come.”
Congress, however, has voted to extend wind and other green tax subsidies in the past when the right deal is put on the table. For example, the wind PTC was reauthorized by Congress as part of the deal at the end of 2012 to avoid tax hikes and spending cuts.
So which energy sources does IEA think most green energy subsidies will fund? The answer is the same as it is today: wind and solar energy.
Photovoltaic solar panels continue “to receive the largest portion of subsidies until falling unit costs help to reduce subsidies below those for bioenergy for power just before 2040,” IEA says. “The value of solar PV in the system also declines with more deployment, making competitiveness a moving target.”
“Subsidies to onshore wind reach a peak just before 2020 and then decline steadily as it becomes competitive with conventional power plants in many locations,” according to IEA.
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