According to a recent report from the U.S. Energy Information Administration (EIA), federal subsidies for renewable energy projects have experienced a significant increase, more than doubling from $7.4 billion in 2016 to $15.6 billion in the latest year.
Key Notes
The report highlights that tax expenditures, constituting 93% of total subsidies, surged to $15.3 billion from $5.6 billion over the same period. These subsidies encompass various forms of support, including tax incentives, research and development (R&D) spending, and the Energy Department’s loan guarantee program.
Fixed Income and Capital Growth In Energy Sector
Renewable energy received a substantial portion of energy-related federal subsidies, accounting for nearly half (46%) of all subsidies and 67% of energy-focused tax spending. The majority of these funds were directed towards wind and solar energy projects, with biofuels such as ethanol and biodiesels also receiving notable support.
Despite the considerable increase in federal spending on renewable energy, the report notes significant variability over the years in terms of both the amount and distribution of subsidies. Direct expenditures, which involve direct government funding for specific industries and businesses, exceeded $1 billion in 2016 and 2017 but declined thereafter.
