Critics of renewable energy have long argued that companies are too reliant on government subsidies. Without these subsidies, critics say, solar and wind energy couldn't survive on their own. But things are changing fast. We've already seen subsidy-free solar installations take off in parts of Latin America, and as the cost of solar and wind keep getting lower, it seems likely that we'll see similar developments built around the world.
In the United Kingdom, for example, there have been countless headlines about the conservative government's dramatic cuts to renewable energy incentives. The assumption from many environmentalists was that the industry would be stopped in its tracks. Now the Guardian reports that British electricity provider Good Energy is aiming to build the country's first subsidy-free wind farm, and it's encouraging investment from the surrounding community — a move that's partially aimed at assuaging planning concerns by demonstrating local support.
Bending with the political winds
The 11-turbine farm, located near Bude, Cornwall, has been in the works for several years. In response to the government's subsidy cuts, as well as comments received on initial proposals, Good Energy recently updated its proposals to use cutting-edge turbines that will boost output by as much as 50 percent while maintaining the original footprint for the project.
In a news release, Good Energy CEO and founder Juliet Davenport suggests that the industry will adapt to a new policy environment: "This is a bold and innovative response to the challenges laid down by government to the renewables industry since the election last year. This project will give local people the chance to show their support for renewable energy, and all the benefits it brings both locally and globally, by investing in their own wind farm."
Saudis plan world's cheapest solar, without government support
The Good Energy development is not the only clean energy project moving ahead without government financial support. The Saudi Electric Company made headlines when it announced the cheapest price for a utility-scale solar project in the world. According to CleanTechnica, the 50-megawatt project will be subsidy-free, and it was made possible by a power purchase agreement of 4.9 cents per kilowatt-hour. (The previous record was around 5.5 cents with subsidies taken out of the equation.)
Given the increasing ability for renewables to compete with and disrupt the fossil fuel business model, and given that utility-scale energy storage is likely to further disrupt this scene in the coming decade, it seems fair to say this is just the beginning for subsidy-free solar and wind.
Anti-renewables strategies will shift
As renewables begin to stand on their own two feet, it will be interesting to watch how and if the anti-renewables lobby conducts itself. In Nevada, for example, opponents of solar energy were able to successfully undermine the state's pro-solar policies, leading to many big solar companies fleeing the state and suspending operations. As the industry frees itself from a dependence on subsidies, perhaps such legislative pushes will prove less successful in the future.
But we still have a ways to go.
While it's encouraging to see solar and wind developments aiming to go it alone, there's a danger that these stories will lend weight to those calling for premature cuts to subsidies. Yes, some developers will be able to adapt and innovate their way to independence, but in a world where mature and polluting industries like coal and oil continue to receive massive subsidies, the path to a level playing field isn't as simple as ending subsidies for clean tech.
However we navigate the road to subsidy-free renewables, that navigation must be guided by a long-term goal of a viable, low-carbon energy industry.