Putting solar subsidies in perspective

Last year I took a look at Roger Bezdek’s analysis showing that over the past 70 years coal, oil and natural gas had taken in 70 percent of the subsidies across the energy industry. Bezdek, a 30 year energy consultant who at one point directed energy research at the Department of Energy, did the analysis for the Nuclear Energy Institute.

It’s not just policy researchers, though, who want a crack at this issue. Venture investors Nancy E. Pfund and Noah W. Walker of DBL Investors just authored “Ask Saint Onofrio: Finding What Has Been Lost in a Tale of Two Energy Sources.” Comparing solar to nuclear, the report showed that at its height in 1963 taxpayers were subsidizing nuclear energy to the tune of $600 per megawatt and that that ratio has declined over time as nuclear has matured. The report notes, “we anticipate a similar decline for solar.” When one looks at the historical figures for energy subsidies, it’s striking just how much went to build out not just nuclear but transportation and drilling infrastructure for fossil fuels, part of why they’re so (relatively) cheap today.

The report comes at a critical time as the Investment Tax Credit for solar will fall to 10 percent in 2016 as various other programs including the 1603 Treasury grants program expired. Key companies like SolarCity are highly dependant on these programs and while solar continues to decline in price a subsidy rollback will hurt.

DBL has investments in a number of solar companies, including SolarCity, BrightSource and Solaria.

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Adam Lesser

Analyst Gigaom Research

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