NCPA - National Center for Policy Analysis


November 10, 2004

State governments are leading the way in the push for renewable energy through incentives and subsidies, but critics argue that mandated renewable energy requirements would cost those who can least afford energy: the poor and the elderly.

Many states have taken the initiative through consumer rebates, subsidies or all-out mandates:

  • Vermont offers rebates of up to $12,500 for households that purchase a solar- or wind-power system.
  • California pays grants to dairy farmers to develop methane from cow manure, which is then burned to produce electricity.
  • Colorado voters just passed a proposal last week requiring energy companies to purchase a share of their energy from renewable sources; Hawaii's governor signed a similar measure.
  • Saratoga, New York, uses a wind farm for 40 percent of the power required for its wastewater treatment facility.

Despite the attractiveness of rebates and subsidies, the cost of renewable energy is still prohibitive for most consumers. In one case, a family in Vermont spent $21,000 installing solar power, the price before the state reimbursed them for one-third of the cost.

Furthermore, mandates for renewable energy use by power companies will cost consumers. Indeed, power companies say that "quotas" set for power companies will disproportionately affect poor and elderly consumers.

Source: Traci Watson, "States Curb Reliance on Fossil Fuels," USA Today, November 8, 2004.

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