The False Economy of Renewables: Hidden Costs and Fragile Foundations, By Chris Knight (Florida) and James Reed
The renewable energy industry has long been heralded as the future of power, clean, cheap, and sustainable. Advocates claim that wind and solar energy, powered by the free forces of nature, are not only environmentally friendly but also economically competitive with fossil fuels. Yet, as Diana Furchtgott-Roth argues in her July 2, 2025, Telegraph article, echoed by The Daily Sceptic, the green lobby's panicked reaction to proposed cuts in U.S. tax credits reveals a stark truth: renewables are far from the self-sustaining solution they're made out to be. Without billions in government subsidies, the industry teeters on the edge of collapse, exposing a false economy propped up by taxpayer dollars and obscured by hidden costs. This blog piece delves into the economic fragility of renewables, their environmental trade-offs, and the broader implications of a subsidy-dependent energy sector.
For decades, renewable energy has been bolstered by massive government support. In the United States, the Inflation Reduction Act (IRA) of 2022 supercharged tax credits for wind, solar, and battery storage, driving a boom in clean energy projects. According to the U.S. Energy Information Administration (EIA), federal subsidies for renewables more than doubled from $7.4 billion in 2016 to $15.6 billion in 2022, accounting for nearly half of all energy-related federal support during that period. Globally, over $100 billion has been poured into wind and solar subsidies over the past two decades, yet the industry still demands more, claiming it needs just a few more years to "stand on its own."
The recent Congressional push to phase out these subsidies, as outlined in The New York Times and Reuters, has sparked outrage from the green lobby, revealing their dependence on taxpayer funds. Senate bills propose terminating tax credits for wind and solar projects not under construction within six months or operational by 2027, while House proposals are even stricter, aiming to end credits almost immediately. Industry leaders like Abigail Ross Hopper of the Solar Energy Industries Association warn that these cuts could shutter factories, kill jobs, and raise electricity bills, admitting that the economic viability of renewables hinges on government support.
This dependency exposes a fundamental flaw: if renewables are as "cheap" as claimed, why do they collapse without subsidies? As Furchtgott-Roth notes, the green lobby's "vitriolic reaction" to proposed cuts lays bare the industry's economic unsustainability. Senate Minority Leader Chuck Schumer's claim that ending tax credits "rolls back all the progress" underscores how the clean energy boom was always an artificial construct, driven by policy rather than market demand.
The narrative that wind and solar are cost-competitive with fossil fuels ignores several hidden costs that burden consumers and taxpayers alike:
1.Intermittency and Backup Costs: Unlike coal, natural gas, or nuclear, wind and solar are intermittent, producing power only when the wind blows or the sun shines. This requires utilities to maintain backup systems, often fossil fuel-based, to ensure grid reliability. A University of Chicago study found that states with renewable portfolio standards (RPS) saw electricity rates rise by 11% for a 1.8% increase in renewable share, reflecting the costs of intermittency, transmission, and stranded assets. Consumers pay for both the renewables and their backups through higher electricity bills.
2.Rising Electricity Prices: Despite claims of falling costs, onshore wind down 70% and solar down 90% over the past decade, average U.S. electricity prices have risen over the past 20 years as renewables entered the mix. In 2024, nine of the top 10 states with the highest electricity prices mandated renewable energy, while the bottom 10 generally did not. The Rhodium Group estimates that repealing clean energy tax credits could raise household energy costs by 7%, but maintaining them also drives up bills due to the hidden costs of intermittency and infrastructure.
3.Taxpayer Burden: Taxpayers fund renewables through both electricity bills and tax credits. The IRA's Production Tax Credit (PTC) offers 2.6¢ per kilowatt-hour for clean energy, while the Investment Tax Credit (ITC) covers 30% or more of project costs. These subsidies, projected to save consumers $220 annually, are offset by the broader economic drag of higher energy costs and reduced growth. Wind receives $6 per unit and solar over $40, compared to net tax revenue from oil and gas.
4.Supply Chain Dependence: Approximately 70% of solar panels, wind turbines, and batteries are manufactured in China, powered by coal plants that undermine the "green" label. Senate bills impose restrictions on projects using Chinese components, but these measures could raise costs further, as China dominates global supply chains. This reliance not only enriches Chinese industries but also ties the U.S. energy transition to a geopolitically sensitive and carbon-intensive supply chain.
The "green" branding of renewables is another illusion. Wind turbines kill birds and, when offshore, disrupt sea mammals, while solar farms encroach on agricultural land, potentially driving up food prices. The environmental impact of manufacturing, largely in coal-dependent China, further tarnishes the clean energy narrative. Mining for critical minerals like lithium and cobalt for batteries often involves ecological degradation and labour abuses, rarely mentioned by renewable advocates. As Furchtgott-Roth argues, "green" and "clean" are marketing terms, not realities, used to justify subsidies to an unsuspecting public.
The renewable industry's growth has been fuelled by artificial incentives, not market-driven efficiency. The EIA reports that 93% of new U.S. electricity capacity in 2024 came from wind, solar, and battery storage, largely due to IRA subsidies. Yet, as Fortune notes, cutting these subsidies could cost the U.S. its edge in the AI race, as data centres demand reliable, affordable power that renewables struggle to provide without backups. The Clean Energy Buyers Association emphasises that wind and solar are critical for meeting surging demand, but their economic viability hinges on tax breaks.
Critics like Alex Epstein argue that renewables add costs to the grid by requiring reliable power plants to "turn up and down" to compensate for their intermittency, effectively acting as a "parasite" on the system. Energy Secretary Chris Wright echoes this, calling wind and solar a burden on the grid and advocating for baseload sources like gas and nuclear. The Washington Post warns that subsidy cuts could lead to 830,000 job losses by 2030 and higher electricity prices, but maintaining subsidies perpetuates a cycle of dependence that distorts markets and stifles innovation.
The green lobby's reaction to subsidy cuts reveals their fear of market scrutiny. Groups like Evergreen Action and the Solar Energy Industries Association predict "the largest spike in utility bills in American history" and job losses if tax credits are repealed. Yet, their dire warnings inadvertently confirm the industry's fragility. If renewables were truly competitive, they would thrive without government handouts, as fossil fuels have done despite their own subsidies. The New York Times notes that even some Republicans, like Senators John Curtis and Lisa Murkowski, fought to soften the cuts, citing job creation in red states, but the broader push aligns with Trump's pro-fossil fuel agenda.
To break the cycle of subsidy dependence, the U.S. needs an energy policy grounded in market realities:
Phase Out All Subsidies: Gradually eliminate tax credits for both renewables and fossil fuels to level the playing field. The EIA notes that fossil fuels received less than 15% of U.S. energy subsidies from 2016 to 2022, compared to half for renewables, suggesting a disproportionate reliance.
Invest in Baseload Power: Prioritise nuclear and natural gas, which provide reliable, 24/7 power.
Address Environmental Impacts: Regulate renewable projects to minimise harm to wildlife and farmland, and incentivise domestic manufacturing to reduce reliance on China.
Enhance Grid Reliability: Invest in transmission infrastructure and battery storage to mitigate intermittency, but without distorting markets through endless subsidies.
The renewable energy industry's dependence on subsidies reveals a false economy built on government largesse rather than genuine competitiveness. Hidden costs, intermittency, backups, rising electricity prices, and environmental trade-offs, belie the "cheap" and "green" narrative. As US Congress debates slashing tax credits, the green lobby's panic exposes the fragility of an industry that cannot stand without billions in taxpayer support. By embracing market-driven solutions and prioritising reliable energy, the U.S. can build a resilient grid without sacrificing economic or environmental integrity. The house of green cards is wobbling— it's time to let it fall.
"The cat is out of the bag, says Diana Furchtgott-Roth in the Telegraph. The vitriolic reaction to Congress's plans to cut tax credits for renewables lays bare how 'cheap' wind and solar really are, and how the endless subsidies are never enough. Here's an excerpt.
Electricity made from renewable sources is not as 'cheap' as its advocates sometimes claim. It evidently cannot survive without billions annually in tax credits.
That's the message from the latest skirmish over America's renewable energy future, where the House and Senate have unveiled duelling visions for the rollback of energy tax credits – each with its own tempo and tone. The vitriolic reaction from the green lobby, and the predictions of disaster for renewables should any of these changes be passed into law, have exposed just how economically unsustainable even the fiercest backers of these energy sources clearly accept them to be.
Supporters of renewable energy have assured us for years that the wind blows and the sun shines free of charge. But although these technologies have received hundreds of billions in subsidies globally over the past 20 years, proponents still demand more – for a few years, we're told, until renewables can stand on their own feet.
Senate Minority Leader Chuck Schumer said: "Eliminating these tax credits radically and irresponsibly rolls back all the progress we have made in recent years. It turns America's clean energy boom into a bust."
But the boom was always something of an illusion. It is often asserted that electricity in the United States made with wind and solar is less expensive than electricity made by natural gas and coal. But rather than declining, average American electricity prices have risen considerably over the past 20 years as wind and solar have entered the electricity mix.
One dirty little secret is that, on a state-by-state basis, nine out of the top 10 states in electricity prices in the United States in 2024 required renewable energy as part of their electricity mix. The bottom 10 states generally did not require renewable energy.
It can cost utility companies more to provide people with electricity using intermittent sources than continuous sources such as natural gas, coal and nuclear power. The utility company is likely to need to put other energy sources in place, to provide back-up should demand not be met when the wind doesn't blow and the sun doesn't shine. …
Taxpayers are paying multiple times for renewables. In their electricity bills, they pay not only for wind and solar, but for the backups to the wind and solar. In their tax bills, they pay for the energy tax credits. They also give up faster economic growth when electricity prices rise.
Another dirty secret is that renewable energy is often neither green nor clean. About 70% of solar panels, wind turbines, batteries and their components are made in China, which remains reliant on coal-fired power plants to fuel its industries. Wind turbines kill birds, and, when offshore, can harm sea mammals. Solar power can take over agricultural land, which is likely to drive up the price of food. 'Green' and 'clean' are marketing hype used to push renewables onto unsuspecting consumers."
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