Kassia Yanosek, a friend and ex-classmate at Stanford, just co-wrote a fascinating article in Foreign Affairs on “The Crisis in Clean Energy“.
Stimulus to renewables are certainly a controversial topic in times of financial restraint. In an ideal world, renewables could compete on an equal footing with 20th-century sources of energy because there would be no subsidies (direct and indirect) to carbon and nuclear energies, and there would be market-based mechanism to incorporate societal costs (e.g. effect of emissions on health and environment) into their prices as well.
Unfortunately, it is not an ideal world just yet, so a faster way to level the field is to subsidize renewables. Easier said than done because, as opposed to the largely hidden subsidies to the oil and nuclear industries (military support, environmental clean-up, health system etc), the direct subsidies that renewables receive are much easier to pinpoint and attack.
Quick article excerpt below – I suggest you read the rest on Foreign Affairs.
Plugging the commercialization gap is far trickier than plugging the technology gap because the costs are greater and the best policies require government agencies to work alongside private actors without undermining market competition — a delicate balancing act. And it is in this area that the clean-energy industry is most in trouble today.