In 2016, the United States will come to a conclusion whether new energies can survive without government assistance. Financial incentives for solar energy will end in 2016, while financial support for wind power has been completed so far. Federal government subsidies for solar and wind developers totaled $ 24 million from 2008 to 2014, according to Bloomberg’s economic sector. This has led to an increase of 12 times the capacity of installed plants over the past decade, contributing to a reduction of at least 10% of costs per year.

The total production of wind and solar power plants is less than 5% of the US electricity. Cutting down subsidies will make it harder for these two sectors to work with the ultra-low-power industry, which works with natural gas and coal. The stock price of two major SunEdison and First Solar developers since June dropped nearly 35 percent. This has been about 20 percent for wind energy.

Solar developers are doing their best to complete their projects by the end of 2016. According to the Bloomberg Economic Service (BNEF) report in 2015, the capacity that connects to the network will be more than 5.8 Gigawatt, which will reach 11 GW by 2016, with a tax credit of 30% From the cost of the projects, BNEF expects that by the end of 2017, 70% of the projects will be released in this sector.

Ron Rash, head of the Energy Affiliate industry, believes financial incentives can cost as much as 100,000 jobs or $ 25 million for economic activity. With subsidies, solar power plants are much more expensive than gas, coal and nuclear. By removing subsidies, solar energy will be more expensive by about 35 to 40 percent, according to Bloomberg.

The condition of wind energy is better because it has already gone through this route to some extent. Installation projects in this sector dropped by 90% due to subsidies cut off in 2013, the highest subsidy ever. The financial credit of $ 23 per MWh was extended to cover projects under construction by 2014. Even with the elimination of tax credits, wind turbines have the ability to compete with fossil fuels in parts of Texas and Oklahoma.

In line with the decline in public sector support, the United States can act as European countries. After years of subsidized hands, Germany, Spain and Czech decided to cut off these subsidies. In Zwinania, the UK government decided to reduce its financial support for ceiling solar panels by 87%. According to Chiggar Shah, founder of SunEdison, all this is part of the investment cycle that is moving around in different parts of the world. “The motive that has created the world-wide industrial industry, which can enter hot and hot markets, was first in Europe, then the United States is now operating in China, India and Africa.”

Translated by: Vahid Amin al-Tajari

Source: Bloomberg