Solar energy is less expensive because of government subsidies. Since the government has no money it doesn’t take from taxpayers, the subsidies divert my tax payments from other purposes. Eliminate all energy subsidies and let all compete on a level playing field.
1) Renewables are already cost-competitive with fossil fuels in most markets, even without subsidies. Wind and solar have among the lowest levelized costs of energy today. -> https://ourworldindata.org/cheap-renewables-growth
2) Government spending isn't always zero-sum. While most funding comes from taxes, governments can also finance through borrowing or money creation (seigniorage). More importantly, public investment—especially in infrastructure or emerging technologies—can be net-positive for the economy. -> https://zenodo.org/records/15490326
3) Subsidies for clean energy are not distorting a level playing field—they’re correcting an unlevel one. Fossil fuels emit greenhouse gases that impose costs on others (climate damage, health effects, etc.) but don’t pay for those costs. That’s a textbook externality—a classic market failure. Subsidies (or ideally a carbon price) help internalize those costs and improve market efficiency. ->https://energyathaas.wordpress.com/2025/03/31/are-clean-electricity-tax-credits-a-bad-deal/
3.1) If anything, the market is currently distorted in favor of fossil fuels, which still receive over $1 trillion in direct subsidies and over $5 trillion in implicit subsidies globally each year, according to the IMF. -> https://ourworldindata.org/how-much-subsidies-fossil-fuels
3.2) Economists overwhelmingly agree that a carbon tax would be more efficient than subsidies, and most would happily support replacing subsidies with pricing mechanisms if politically feasible.
4) Lastly, nearly all modern economics—environmental, behavioral, institutional, labor, public—is focused on market failures like these. It’s not about picking winners, it’s about correcting inefficiencies and reallocating resources more optimally.
The "levelized cost of energy" for wind and solar is a joke, because they ignore their intermittency, so that other sources of energy, primarily dispatchable, must exist to take the load when they don't—which have to be paid for. According to the EIA, the capacity factor for solar in Texas is 24-26 percent, which means the rest of the time, dispatchable generation must make up the balance. And when the sun is shining and the wind is blowing, wind and solar prices are often negative, i.e., they are paying others to take their power because there is too much of it, which they can afford to do ONLY because of the subsidies.
Lindy, you brought up the cost of renewables to argue they're not truly competitive without subsidies—but that’s precisely what Levelized Cost of Energy (LCOE) helps assess: the unsubsidized, per-MWh cost of generation over a project’s lifetime. While LCOE isn’t meant for grid reliability planning, it is appropriate for comparing generation costs—and on that front, renewables lead. (https://heatmap.news/energy/levelized-cost-solar)
Yes, renewables are intermittent—but that’s not some overlooked detail; it’s a core planning consideration. Their variability is partly offset by complementary generation patterns (wind and solar balance each other diurnally and seasonally), and increasingly by battery energy storage systems (BESS). BESS are not only dispatchable—they’re actively displacing fossil fuels in ancillary services markets and enhancing grid flexibility by following net load.
Negative prices aren’t a market failure—they’re a predictable outcome in marginal cost-based markets under certain conditions: inflexible supply, low demand, and zero or negative marginal cost resources (like wind and solar with PTCs). While persistent negative prices may warrant scrutiny, price volatility is a normal and healthy signal in competitive electricity markets. Tools like scarcity pricing, demand response, and capacity mechanisms exist to manage these dynamics effectively.
And again, subsidies aren’t distorting a fair market—they’re correcting a broken one. Fossil fuels impose real, unpriced costs on society (climate, health, etc.). In the absence of a carbon price, subsidies are a second-best but economically justified way to address that externality. In fact, research shows that well-designed clean energy subsidies can be more cost-effective than carbon pricing alone, particularly at moderate-to-high levels of decarbonization (https://ceepr.mit.edu/choosing-climate-policies-in-a-second-best-world-with-incomplete-markets/).
Honestly, I’d really encourage you to actually read the references I shared—because the concerns you’re raising have been studied in depth, and the literature offers a much more complete picture than the common talking points. If you’re genuinely interested in how modern power markets and climate incentives work, this NBER paper is a great place to start: https://www.nber.org/papers/w30263
Please see this reference, the part of it which calculates the unsubsidized levelized cost of energy. https://www.lazard.com/media/0hqfye2m/lazards-levelized-cost-of-energy-version-120-vfinal.pdf. It's not as favorable as you seem to think. And as you write, it's not intended for grid reliability planning—but renewables intermittency and lack of reliability impose costs on the grid which have to be paid. The inverters in use in the Texas grid are grid-following (GFL) inverters, which have no inertia. As a result of that lack of inertia, ERCOT is paying over a billion dollars to install 6 synchronous condensors in west Texas and elsewhere. The cost of those are not included in the LCOE, even though they are the direct result of the amount of wind and solar on the grid.
Texas has experienced two substantial outages related to those inverters, one in 2021, and another in 2022. The second knocked 2.2 GW of generation of the grid, which was classified as a NERC 3a category outage. Fortunately, they did not create a cascading outage which took down the entire grid. Those incidents are referred to as Odessa I and Odessa II.
In 2021, ENTSO_E, the European system operator, wrote that the lack of inertia related to the increasing amount of wind and solar on the grid posed a reliability risk to the grid. They recommended installation of synchronous condensers, and converting the inverters from grid-following inverters to grid-forming inverters (GFMs), which are capable of providing synthetic inertia to the grid, as well as being islanded. It wasn't done. On April 28th of this year, Spain and Portugal experienced a total blackout, when an estimated 71 to 74 percent of the power was being supplied by renewables.
NERC, in it's 2025 reliability assessment wrote of the increasing risk of outages related to the lack of dispatchable thermal generation on all of the U.S. and Canadian grids, and predicted that MISO was at risk of rolling blackouts this summer, because of retirement of thermal generation unable to compete on the market with subsidized renewables. And that's already happened in Louisiana.
ERCOT has current projects investigating gird-forming inverters, and has an Inverter Based Resource Working Group (IBRWG) to resolve the problems created by renewables on the grid.
LCOE is a scam which ignores the reliability cost of renewables.
Kade: I am an electrical engineer, a member of the IEEE Power and Energy Society, and I monitor problems with the ERCOT grid for a policy foundation, including the meetings of the IBRWG. But I prefer not to depend on luck—I have a 30kW whole-house generator, which has run about 77 hours since it was installed after Winter Storm Uri. I do have 2 solar panels charging batteries, one which powers my gate opener, and one which illuminates my flag lights. Cheers!
Totally fair point, removing all energy subsidies sounds like a clean solution. But if we did that across the board, prices for everything (gas, coal, renewables) would spike. That kind of sticker shock would hit hard, especially with inflation already hurting families.
And that’s exactly why we never see serious efforts to cut all subsidies. The political target is almost always renewables, even though fossil fuels still receive billions more globally.
Meanwhile, China is playing to win. I mean look at the article above, China now produces over 80% of the world’s solar panels and batteries and added more wind and solar than the rest of the world combined... all heavily subsidized.
So if we’re serious about a level playing field, we should ask who’s building the future and who’s sitting on the sidelines talking about it.
Cutting U.S. support while China doubles down isn't free market purity.
All forms of energy generation (and fossil fuel extraction) receive government subsidies, and exist within a framework of government policy.
Solar energy is less expensive because of government subsidies. Since the government has no money it doesn’t take from taxpayers, the subsidies divert my tax payments from other purposes. Eliminate all energy subsidies and let all compete on a level playing field.
1) Renewables are already cost-competitive with fossil fuels in most markets, even without subsidies. Wind and solar have among the lowest levelized costs of energy today. -> https://ourworldindata.org/cheap-renewables-growth
2) Government spending isn't always zero-sum. While most funding comes from taxes, governments can also finance through borrowing or money creation (seigniorage). More importantly, public investment—especially in infrastructure or emerging technologies—can be net-positive for the economy. -> https://zenodo.org/records/15490326
3) Subsidies for clean energy are not distorting a level playing field—they’re correcting an unlevel one. Fossil fuels emit greenhouse gases that impose costs on others (climate damage, health effects, etc.) but don’t pay for those costs. That’s a textbook externality—a classic market failure. Subsidies (or ideally a carbon price) help internalize those costs and improve market efficiency. ->https://energyathaas.wordpress.com/2025/03/31/are-clean-electricity-tax-credits-a-bad-deal/
3.1) If anything, the market is currently distorted in favor of fossil fuels, which still receive over $1 trillion in direct subsidies and over $5 trillion in implicit subsidies globally each year, according to the IMF. -> https://ourworldindata.org/how-much-subsidies-fossil-fuels
3.2) Economists overwhelmingly agree that a carbon tax would be more efficient than subsidies, and most would happily support replacing subsidies with pricing mechanisms if politically feasible.
-> https://www.nber.org/system/files/working_papers/w30321/w30321.pdf
4) Lastly, nearly all modern economics—environmental, behavioral, institutional, labor, public—is focused on market failures like these. It’s not about picking winners, it’s about correcting inefficiencies and reallocating resources more optimally.
The "levelized cost of energy" for wind and solar is a joke, because they ignore their intermittency, so that other sources of energy, primarily dispatchable, must exist to take the load when they don't—which have to be paid for. According to the EIA, the capacity factor for solar in Texas is 24-26 percent, which means the rest of the time, dispatchable generation must make up the balance. And when the sun is shining and the wind is blowing, wind and solar prices are often negative, i.e., they are paying others to take their power because there is too much of it, which they can afford to do ONLY because of the subsidies.
Lindy, you brought up the cost of renewables to argue they're not truly competitive without subsidies—but that’s precisely what Levelized Cost of Energy (LCOE) helps assess: the unsubsidized, per-MWh cost of generation over a project’s lifetime. While LCOE isn’t meant for grid reliability planning, it is appropriate for comparing generation costs—and on that front, renewables lead. (https://heatmap.news/energy/levelized-cost-solar)
Yes, renewables are intermittent—but that’s not some overlooked detail; it’s a core planning consideration. Their variability is partly offset by complementary generation patterns (wind and solar balance each other diurnally and seasonally), and increasingly by battery energy storage systems (BESS). BESS are not only dispatchable—they’re actively displacing fossil fuels in ancillary services markets and enhancing grid flexibility by following net load.
Negative prices aren’t a market failure—they’re a predictable outcome in marginal cost-based markets under certain conditions: inflexible supply, low demand, and zero or negative marginal cost resources (like wind and solar with PTCs). While persistent negative prices may warrant scrutiny, price volatility is a normal and healthy signal in competitive electricity markets. Tools like scarcity pricing, demand response, and capacity mechanisms exist to manage these dynamics effectively.
And again, subsidies aren’t distorting a fair market—they’re correcting a broken one. Fossil fuels impose real, unpriced costs on society (climate, health, etc.). In the absence of a carbon price, subsidies are a second-best but economically justified way to address that externality. In fact, research shows that well-designed clean energy subsidies can be more cost-effective than carbon pricing alone, particularly at moderate-to-high levels of decarbonization (https://ceepr.mit.edu/choosing-climate-policies-in-a-second-best-world-with-incomplete-markets/).
Honestly, I’d really encourage you to actually read the references I shared—because the concerns you’re raising have been studied in depth, and the literature offers a much more complete picture than the common talking points. If you’re genuinely interested in how modern power markets and climate incentives work, this NBER paper is a great place to start: https://www.nber.org/papers/w30263
Please see this reference, the part of it which calculates the unsubsidized levelized cost of energy. https://www.lazard.com/media/0hqfye2m/lazards-levelized-cost-of-energy-version-120-vfinal.pdf. It's not as favorable as you seem to think. And as you write, it's not intended for grid reliability planning—but renewables intermittency and lack of reliability impose costs on the grid which have to be paid. The inverters in use in the Texas grid are grid-following (GFL) inverters, which have no inertia. As a result of that lack of inertia, ERCOT is paying over a billion dollars to install 6 synchronous condensors in west Texas and elsewhere. The cost of those are not included in the LCOE, even though they are the direct result of the amount of wind and solar on the grid.
Texas has experienced two substantial outages related to those inverters, one in 2021, and another in 2022. The second knocked 2.2 GW of generation of the grid, which was classified as a NERC 3a category outage. Fortunately, they did not create a cascading outage which took down the entire grid. Those incidents are referred to as Odessa I and Odessa II.
In 2021, ENTSO_E, the European system operator, wrote that the lack of inertia related to the increasing amount of wind and solar on the grid posed a reliability risk to the grid. They recommended installation of synchronous condensers, and converting the inverters from grid-following inverters to grid-forming inverters (GFMs), which are capable of providing synthetic inertia to the grid, as well as being islanded. It wasn't done. On April 28th of this year, Spain and Portugal experienced a total blackout, when an estimated 71 to 74 percent of the power was being supplied by renewables.
NERC, in it's 2025 reliability assessment wrote of the increasing risk of outages related to the lack of dispatchable thermal generation on all of the U.S. and Canadian grids, and predicted that MISO was at risk of rolling blackouts this summer, because of retirement of thermal generation unable to compete on the market with subsidized renewables. And that's already happened in Louisiana.
https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_SRA_2025.pdf
ERCOT has current projects investigating gird-forming inverters, and has an Inverter Based Resource Working Group (IBRWG) to resolve the problems created by renewables on the grid.
LCOE is a scam which ignores the reliability cost of renewables.
It's kind of like whack-a-mole. Best of luck, Lindy!
Kade: I am an electrical engineer, a member of the IEEE Power and Energy Society, and I monitor problems with the ERCOT grid for a policy foundation, including the meetings of the IBRWG. But I prefer not to depend on luck—I have a 30kW whole-house generator, which has run about 77 hours since it was installed after Winter Storm Uri. I do have 2 solar panels charging batteries, one which powers my gate opener, and one which illuminates my flag lights. Cheers!
Let's talk energy subsidies - https://tinyurl.com/lhffsubsidies
Note that I said, " Eliminate all energy subsidies and let all compete on a level playing field."
Totally fair point, removing all energy subsidies sounds like a clean solution. But if we did that across the board, prices for everything (gas, coal, renewables) would spike. That kind of sticker shock would hit hard, especially with inflation already hurting families.
And that’s exactly why we never see serious efforts to cut all subsidies. The political target is almost always renewables, even though fossil fuels still receive billions more globally.
Meanwhile, China is playing to win. I mean look at the article above, China now produces over 80% of the world’s solar panels and batteries and added more wind and solar than the rest of the world combined... all heavily subsidized.
So if we’re serious about a level playing field, we should ask who’s building the future and who’s sitting on the sidelines talking about it.
Cutting U.S. support while China doubles down isn't free market purity.
It’s strategic surrender.