Reframing the current clean energy incentive debate

I speak with dozens of solar energy and battery storage developers every month, and lately the conversations circle back to the same thing: what will the Trump-endorsed Big Beautiful Bill do to clean energy subsidies? The current administration frames the proposed rollbacks to the Inflation Reduction Act as a correction to “unprecedented” support for clean energy. But here’s the truth: oil, gas, and coal have received massive federal subsidies for decades. Clean energy isn’t the first—or the only—technology to benefit from government support.

There are good-faith questions around how subsidies are structured and when they should phase out, but one fact is consistently overlooked: supporting emerging energy technologies has always been part of America’s policy. And I’ve seen it from the inside.

Current U.S. Energy Subsidies: Oil, Gas, and Clean Energy Compared

While working with the Department of Energy’s Loan Programs Office (LPO) in 2010, I witnessed a period of intense focus on jumpstarting clean energy innovation. We helped support groundbreaking solar and wind projects, but government support also extended to fossil fuel technologies, often without the scrutiny renewables tend to attract.

Unlike fossil fuel projects, renewable energy projects do not qualify for many of these provisions mentioned below. Master Limited Partnerships (MLPs) offer favorable tax treatment and streamlined capital‑raising, but are unavailable to renewable energy companies under current law.

Meanwhile, fossil fuels enjoy more than $20 billion in annual federal tax breaks (this figure does not include billions in indirect benefits). Here's a snapshot of major active subsidies (not exhaustive):

Source: EESI – Fossil Fuel Subsidies Fact Sheet (2019), Joint Committee on Taxation FY2017 analysis.

Source: DBL Investors, “What Would Jefferson Do?”

History of U.S. Energy Subsidies: Fossil Fuels vs. Renewables

The U.S. government has repeatedly leveraged subsidies to build new energy markets, including fossil fuels in their early days.

• Oil: Percentage depletion introduced in 1913, expanded 1926, and still active.

• Coal: Federal land grants and rail infrastructure underpinned 19th/early 20th-century expansion, and many many more programs

• Natural Gas: Supported by government‑built pipelines and regulated pricing

 Source: EBSCO, DBL Investors, “What Would Jefferson Do?”

Identify, Support, Scale

America’s subsidy formula has been: identify promising energy technologies, provide early support, and then enjoy gains in security, jobs, etc. These weren't handouts—they were investments. Early oil and gas success grew in part from federal backing.

I’ve seen the same trajectory unfold in clean energy in my own experience building projects. Over the past 10–15 years, solar energy has gone from expensive to mainstream and cost-competitive. The levelized cost of energy (LCOE) for utility-scale solar has dropped more than 80%, according to Lazard—making it a competitive source of new electricity generation. Note that while there are hundreds of LCOE studies with different exact figures, there is consensus that solar LCOE is a fraction of what it once was.

Source: U.S. Energy Information Administration, Lazard Levelized Cost of Energy Analysis (2021)

What’s Changed Today?

While permanent fossil fuel tax perks often draw little fire, clean energy incentives are visible, temporary, and highly politicized.

That framing distorts the policy conversation. As a 2021 Nature Energy commentary points out, governments still direct nearly three times more subsidies to fossil fuels than renewables.

Why Energy Subsidy Context Matters in U.S. Climate Policy

As the Senate reevaluates the House reconciliation bill, policy discussions should be rooted in context, not myth. Clean energy subsidies aren’t an anomaly; they’re part of an American playbook dating back over a century.