Renewable Energy Doing So Well That Subsidies Could End: Energy Secretary Moniz


Wind farm, by Flickr user Patrick Finnegan (Used under CC License)

Wind farm, by Flickr user Patrick Finnegan (Used under CC License)

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Government subsidies have been an important lifeline for renewable energy, helping to make different technologies viable even when costs are not in their favor.

But at what point will the industry be competitive enough with fossil fuels that subsidies will no longer be necessary?

It's possible that will happen sooner, rather than later.

DON'T MISS: As Solar Power Spreads, Diverse Users Fight Utility Attempts To Penalize It

The head of the U.S. Department of Energy now believes renewable energy is doing well enough that subsidies could end.

Energy Secretary Ernest Moniz now believes renewable energy can be cost-competitive with fossil fuels, even without subsidies, reports the Washington Examiner.

On a call with reporters earlier this week, Moniz said the Obama Administration supports an extension of tax credits for solar, but that he believes the industry could continue to grow without them.

Photovoltaic solar power field at Volkswagen plant in Chattanooga, Tennessee

Photovoltaic solar power field at Volkswagen plant in Chattanooga, Tennessee

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He said recent cost reductions in the solar industry have "been incredible."

Moniz expects the cost of a rooftop solar panel to quickly fall to 6 cents per kilowatt-hour, which he claims would make solar "extremely competitive" with natural gas and grid-based electricity sources.

A report released by the Department of Energy earlier this month also claims that the cost of wind power is falling, and that wind-generated electricity could soon become cost-competitive with more traditional sources as well.

ALSO SEE: Some Solar, Wind Power Competes With Natural Gas Without Incentives: Study (Sep 2014)

It claims wind-power prices dropped from 7 cents per kWh in 2009, to 2.35 cents per kWh in 2014.

The drop is attributed to lower wind-turbine prices and installation costs for wind-farm projects, and anticipated increases in production capacity.

For its part, though, the wind-energy industry hopes that subsidies continue.

Ford and Windy Energy Windy System clean-energy pilot program.

Ford and Windy Energy Windy System clean-energy pilot program.

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The American Wind Energy Association trade group says that the success of wind energy varies in different parts of the country, and that steady incentives are still needed to make it viable everywhere.

The industry needs "stable, predictable policy" to continue at its current rate of growth, Tom Kiernan--American Wind Energy Association CEO--said earlier this month.

MORE: Wind, Natural Gas, Solar Provide More U.S. Power, Replacing Coal

Congress allowed wind tax credits to expire at the end of 2014, but this summer the Senate Finance Committee passed a measure that would temporarily reinstate some form of wind-energy tax credits.

However, it did not address solar tax credits, which are set to phase out at the end of next year.

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