The renewable energy sector needs assistance from the federal government in order to survive. This should be made a top priority by the federal government, because if it is not, millions of jobs would be lost, investors would lose millions of dollars, and our national security will be severely compromised.
According to a study by the Brookings Institution, the World Resources Institute, and the Breakthrough Institute, virtually all federal support for the renewable energy sector will be gone by 2014, if no action is taken. Approximately 70% of the federal programs that support renewable energy are set to expire in 2014, as they were enacted through economic stimulus programs in 2009. Thanks in large part to federal subsidies programs, energy derived from clean, renewable sources is now as cheap as energy from natural gas in some locations. When these subsidies and tax breaks go away, research and development will stagnate, prices will not get lower and the technology will not improve. The energy consumer will no longer have an incentive to choose clean alternative energy over fossil fuels.
Another adverse effect which a bust in the renewable energy sector will have is our own national security interests. Without government assistance in the renewable energy space, fossil fuels will continue to be the top choice amongst energy consumers. The Department of Defense is the nation’s top consumer of fossil fuel. With the volatility of the oil markets, this is hard to budget for. In addition, without government assistance, clean energy will price itself out of Defense Department contracts and our fighting forces will still depend on oil. The enemy knows how much the military depends on oil. They frequently attack fuel convoys in Pakistan and in Afghanistan. Switching over to renewable energy will reduce these deadly attacks. But without subsidies and tax incentives, a green energy producer will lose the market to a deeply entrenched fossil fuel entity.
Government assistance is needed in this fledgling industry. Without assistance it will go into a bust cycle. Goldman Sachs is planning on investing billions of dollars in green energy, but without subsidies and tax breaks, millions of investors will lose out. To protect jobs, investments and our troops overseas, the federal government still needs to support this fast growing industry.