NCPA - National Center for Policy Analysis

Where Federal Energy Subsidies Really Go

August 24, 2011

A new report from the Department of Energy's research arm, the Energy Information Administration shows that "renewable" energy firms are heavily dependent on government support, says Robert L. Bradley, Jr., the CEO and founder of the Institute for Energy Research.

  • The federal government handed out $37.2 billion in direct energy subsidies in 2010, an increase of more than $19 billion over 2007.
  • Of that $19 billion increase, additional subsidies for renewables amounted to more than $9 billion, a 186 percent increase.
  • Subsidies for renewables now total $14.7 billion.

Wind power was the biggest recipient of federal energy dollars.

  • Last year, this sector took in almost $5 billion in subsidies -- a more-than-tenfold increase from 2007.
  • Meanwhile, solar energy subsidies increased six times over the same period, from $179 million to $1.13 billion.
  • And biofuels (think ethanol) saw a jump from $4 billion to $6.6 billion.

Funneling money into renewables is certainly politically popular.  But, at the end of the day, what exactly do green firms have to show for all that money?  The truth is, not much.  Wind power, for example, provides a paltry 1.2 percent of total domestic energy production.  That's an increase of just 0.7 percent since 2007, despite billions of dollars in taxpayer resources.

If wind or solar or biofuels truly represent a revolution in American energy, that's great -- but let them compete on the open market, says Bradley.

Source: Robert L. Bradley, Jr., "Where Federal Energy Subsidies Really Go," Forbes, August 15, 2011.  "Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010," Energy Information Administration, July 2011.

For text:

For study:


Browse more articles on Environment Issues