April 27th, 2010

No More Renewable Energy Incentives


First, don’t get all upset! I admit, I just wrote this title to rope you in and peak your interest because I’m assuming you think that renewable energy is awesome and needs some incentives to get the industry kick started and to decrease the learning curve, test out new technologies yadda yadda yadda. I agree with you.

Here’s the thing, I really don’t think we need more incentives for renewables, I think we need to start removing subsidies for traditional fuel sources. The reality is that with full cost accounting and taking into account the price of carbon, renewable sources at the current level of technology instantly become competitive with fossil fuels. Renewable Energy World recently wrote that from 2002 – 2008 there were more then 500% more subsidies for fossil fuels than for traditional renewables. Granted, these numbers have changed for the better with the passing of the stimulus bill in 2009. However, although this has been good news for the industry is also symbolizes a very inefficient approach to creating the renewable industry.

We all should be concerned about government waste, regardless of your political affiliation. If people are concerned about government waste, subsidizing an industry to compete with an already heavily subsidies industry is very, very, very, I’ll say it again, very wasteful.

Now, I completely agree with Ice T when he said “don’t hate the playa’, hate the game”. Its true that the renewable industry was probably too small to go up against the large and full pocketed lobbyists from the fossil fuel industry and that the only thing they could do is get some incentives for themselves.

However, the next step for the industry must to be reduce and then remove subsidies for the traditional fossil fuels.

What do you think will be the most effective way to do this? I know that most fossil fuel subsidizes are national while a lot of renewable policies are driven at a state level, which makes it a more interesting problem.

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Chris Williams

About Chris Williams

Chris Williams is the editor of Green Light Distrikt and Chief Marketing Officer at HeatSpring . He has experience in business development, prototyping and new venture research with a focus on geothermal heat pumps, solar thermal and solar photovoltaic technologies. Chris is an IGSHPA accredited geothermal installer and NABCEP certified solar installer. Chris is focused on solving customer facing issues in the creation and adoption of clean energy technologies and products. Chris has installed over 300kW of solar and tens of geothermal systems. He's invented the PV Pal , developed many trainings at HeatSpring, publishes the NABCEP Study Guide , the Hitchhikers Guide to Cleantech and has done due diligence research for Urgent VC . Feel free to connect with him @topherwiliams , on Linkedin , or through email about new ventures, collaborating, writing, research or whatever is on your mind.

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  • http://www.emergentgroup.com Jesse

    not sure if it’s so simple as “500% more” since they’re probably referring to a volume number. Let’s say renewables received 5 billion in subsidies, meaning fossile fuels received approximately 25 billion over the same time period, or about 5 x as much. Since renewables make up such a small proportion of our energy portfolio, we find that renewables are actually receiving quite a bit more per MW than fossil fuels. I find that this way of looking at the numbers can fall short in a deep discussion.

    What I find more compelling? The fact that fossil fuels have been heavily subsidized for many decades, while renewables are becoming competitive (w/o a price on carbon!) after less than a decade of heavy subsidization.