U.S. government support for renewable energy may plunge from record levels, setting back the use of wind and solar power before they can compete on their own with oil, gas and coal.
Direct spending, tax breaks and research funding pushed federal renewable-energy subsidies to $14.7 billion in 2010, according to Alan Beamon, director of the Energy Information Administration’s Office of Electric, Coal, Nuclear and Renewables Analysis. Project developers are lining up for subsidies approved in the 2009 stimulus bill as incentives expire and the deficit-reduction deal dims prospects for future backing of solar panels and wind farms.
“The debt agreement, which is focused on cuts only and not revenue increases, makes it more likely that this infant sector gets strangled before it matures,” Daniel J. Weiss, a senior fellow at the Center for American Progress, a Washington policy group that advises Democrats, said in an interview with Bloomberg Government.
The deal on a debt-limit increase that Congress and President Barack Obama struck to avert a U.S. default would result in at least $2.1 trillion in spending cuts, according to the Congressional Budget Office. Additional savings of at least $1.2 trillion would come from enactment of a deficit-reduction bill or from automatic spending cuts if Congress fails to accept a package framed by a 12-member panel.
Read More: U.S. Debt Deal Kills Off Prospects of Renewable-Power Support