Federal Renewable Energy Subsidies Surge to $15.6 Billion in 2022, More Than Double Since 2016

Federal subsidies dedicated to renewable energy have experienced a remarkable increase, more than doubling from $7.4 billion in 2016 to $15.6 billion in 2022, reveals the latest analysis from the U.S. Energy Information Administration (EIA).

Highlights:

• Overall federal subsidies for renewable projects surged to $15.6 billion in 2022, up from $7.4 billion in 2016.
• Tax-related incentives, representing 93% of these subsidies, tripled from $5.6 billion to $15.3 billion during this period.
• Spending peaked notably in 2020, reflecting heightened federal commitment to clean energy.

The comprehensive federal support encompasses tax incentives, research and development funding, and loan guarantees from the Department of Energy. Tax expenditures dominate this landscape, making up the vast majority of financial aid to renewables.

Nearly half (46%) of all energy-related federal subsidies and two-thirds (67%) of energy-focused tax incentives were funneled into renewable sources. The lion’s share of these credits targeted wind and solar energy projects, with significant investments also directed toward biofuels such as ethanol and biodiesel.

While federal spending on renewables has grown substantially since 2016, the allocation and amounts have fluctuated. Direct government expenditures exceeded $1 billion in 2016 and 2017 but declined sharply afterward. Conversely, tax incentive spending nearly doubled from $5.6 billion in 2017 to over $10 billion in 2018 and has steadily increased since, culminating in a peak year in 2020 that accounted for 21% of total renewable energy expenditures during this timeframe.

These trends underscore the expanding federal commitment to fostering clean energy technologies and reducing reliance on fossil fuels.

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