Our current renewable energy subsidy path (including tax credits, grants, mandated purchases and government loan guarantees) has proved to be unsustainable for a variety of reasons.
FORBES: Too-Green-To-Fail Energy Policies Flunk Achievement Tests
The list of failed firms who received a Department of Energy green-energy subsidy got a bit longer as lithium ion battery maker A123 filed for bankruptcy Tuesday.
The effect of an energy saving subsidy in China is also expected to stimulate demand for LED TV products.
That points to the second area where government action is justified in energy policy: subsidy reform.
This would continue a subsidy to renewable energy that currently allows investors in solar projects to claim 30% off their investment tax bill.
Those rules, which are expected to be finalized in mid-2012, constitute another preferential subsidy for wind energy that will raise electricity prices for everyone, whether they rely upon that source or not.
FORBES: Too-Green-To-Fail Energy Policies Flunk Achievement Tests
But if prices continue to rise the government may come under pressure to do more, such as to reduce the subsidy for renewable energy schemes that are being paid for by higher electricity bills.
Europe has similarly daft subsidy regimes with equally perverse consequences the German subsidy for solar energy, for instance, which has diverted the world's solar-cell production to sun-free Germany, thus raising the price in sunny countries where it might be usefully employed.
Most of this burden was carried as an implicit subsidy to domestic energy consumers, with the price of diesel fuel, for example, set at the equivalent of two American cents a litre, and petrol selling for less than bottled water.
ExxonMobil is publicly disdainful of government help, and says it has no interest in any energy source that requires a public subsidy.
But a robust, renewable energy market will remain hampered if the energy industry continues to chase the next subsidy.
FORBES: Government Subsidies: Silent Killer Of Renewable Energy
What do federal subsidy rip-offs for green energy and Chicago low-cost public housing politics have in common?
FORBES: Obama Kick-Back Cronyism, Part 1: Stimulating Green Energy the Chicago Way
Renewable energy, while still viable, has lost significant subsidy and is not on the same growth path.
They also will want to know how they are supposed to plan long-term investments if the chancellor will not say years in advance how much subsidy will be allowed to go to clean energy sources from people's bills.
In most states, solar installations are driven by state renewable energy incentives that can be added to the federal 30% subsidy known as the investment tax credit.
FORBES: REC Chief Sketches Tortured (But Possible) Path To Solar Grid Parity
The argument, put forward by energy secretary Ed Davey among others, went on to suggest the subsidy loading would increase by a factor of as much as ten.
For this reason, the foreign tax credit has never been defined as a subsidy by any administration or Congress in any comprehensive study examining energy tax policy.
Again, like Spain, which boasts a significantly more daunting sector deficit, Greece has decided further cuts to subsidy programs are the best way to deal with a mounting energy sector deficit.
Germany's Energy Minister, Peter Altmaier, has now proposed putting a cap on the subsidy.
South-East Asia's subsidy-slashing is doing it plenty of good and little harm, says David Fyfe of the International Energy Agency.
应用推荐