According to the Energy Information Administration (EIA), federal subsidies for renewable energy — including biofuels and electricity generation — dropped to $6.7 billion in 2016. This reduction represents a 56 percent decline from 2013, as support from the American Recovery and Reinvestment Act of 2009 (ARRA) began to decline.
Taxes provided 80 percent of 2016 renewables subsidies. From these subsidies, biofuels claimed 51 percent of the $5.6 billion in renewable tax expenditures. These fuel sources also comprised 77 percent of tax expenditures in 2010, but that number dropped to 31 percent three years later. This change stemmed primarily from the expiration of the Volumetric Ethanol Excise Tax Credit at the end of 2011.
Renewable electricity-related tax expenditures provided nearly 70 percent of 2013 renewable electricity subsidies, falling to about half that share in 2016. Most of these dollars went to commercial solar and wind installations from the Production Tax Credit (PTC) and the Investment Tax Credit (ITC).
The PTC provided an inflation-adjusted tax credit worth 2.4 cents per kilowatt-hour (kWh) in 2016, while the ITC provided a deduction equal to 30 percent of facility installation costs. The EIA estimates the PTC and ITC credits taken in FY 2016 at $1.4 billion and $1.2 billion, respectively.
Enacted in 2009, ARRA was a broad-based set of programs designed to expedite economic recovery, including energy infrastructure. Under ARRA, the Department of Energy (DOE) invested more than $31 billion, with much of this funding supporting renewable energy projects. However, most of the ARRA energy program provisions expired in 2016.
Federal R&D expenditures for renewable energy were estimated at $850 million in 2010 and 2013, but both dropped to $450 million by 2016. Another $296 million in federal loan guarantees were distributed to recipients in 2010, but they fell to zero in 2013 and 2016.