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United States

United States

Wind subsidies fall 80% in three years

UNITED STATES: Wind projects in the US received $1.27 billion in subsidies and support in 2016, down from $6.19 billion in 2013, the latest figures from the country's Energy Information Administration (EIA) show.

Renewable energy subsidies fell due to the market competitiveness of renewable electricity technologies, the EIA said (pic: Mortenson)
Renewable energy subsidies fell due to the market competitiveness of renewable electricity technologies, the EIA said (pic: Mortenson)

New data from the EIA looked at the subsidies paid to a variety of energy sources, through direct expenditure, tax expenditure (such as the production tax credit for renewables), research and development grants and Department of Energy loan programmes.

It found support and subsidies for wind fell by almost 80% between 2013 and 2016 to $1.27 billion, due to a significant fall in direct expenditures.

Solar, meanwhile, received $2.23 billion in support in 2016 – down 60% from 2013 – while biofuels had $2.81 billion.

In contrast, the coal industry received $1.26 billion in support in 2016, up from $1.1 billion in 2013. Coal supplies roughly 30% of the US’ power generation, while wind provides a little over 5%.

For renewables as a whole, the support and subsidies total fell from $15.26 billion to $6.68 billion.

"The amount and distribution of renewable energy subsidies over time… have depended on congressional authorisations and the market competitiveness of renewable electricity technologies," the report stated. 

Direct expenditure

In 2013, wind operators received almost $4.5 billion in direct expenditure from the US government. This fell to just $4 million in 2016, the data showed.

The EIA defined "direct expenditures" as: "The amount of grants, loans, or other financial assistance awards made directly to recipients."

In the report, the EIA said the fall in direct expenditures between 2013 and 2016, seen across the renewables sector, was the result of the expiration of the Section 1603 grant programme, which was created to provide payments to certain projects in lieu of tax credits.

Tax expenditure

Tax expenditures for wind, meanwhile, fell 26% from $1.68 billion in 2013 to $1.24 billion in 2016.

"In 2016, tax expenditures alone accounted for 80% of total renewable energy subsidies," the EIA said.

The provision of research and development (R&D) grants has also fallen. The wind sector received $51 million in R&D funding in 2013, which halved to $24 million in 2016, the EIA figures showed.

The American Wind Energy Association (AWEA) will hold its Windpower 2018 conference and exhibition in Chicago (7-10 May). Windpower Monthly will bring all of the coverage from the show across the week. 

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