Here’s Why Subsidy-Free American Solar Energy Dominates Grid When We Let the Market Decide

By:  SEIA

In America, we pride ourselves on our free-market system where innovation thrives. It’s this commitment to fair competition that has driven America’s leadership on the global stage – leading the world in everything from the development of life-saving medicines to cutting-edge technologies that have changed the world.

The energy industry is no different. Competition has driven major advances in efficiency and cost reductions across technologies. The meteoric growth of the solar industry has been enabled by the technology’s rapid cost declines since the early 2010s, and module prices are a fraction of what they once cost.

But today, these free market and fair competition foundations are under threat. Despite claiming to want clean energy to compete on a level playing field with fossil fuels, Energy Secretary Chris Wright and the other architects of this administration’s energy policy have put their thumb on the scale in favor of their preferred technologies.

If this is what they think it means to build on America’s legacy of free and fair competition, they are sorely mistaken.

Fossil fuels in this country have a long legacy of reaping the benefits of federal subsidies from the U.S. government. According to the Fossil Fuel Subsidy Tracker, fossil fuels received over $16 billion in subsidies in 2023. And according to a report from Oil Change International, approximately $30 billion in federal subsidies flowed from the U.S. government to the fossil fuel industry in 2024.

These subsidies are obscured deep in the tax code, and the fossil fuel industry has benefited from them for decades. Most notably, these subsidies enable companies to deduct the value of drilling costs from their taxes. A report from Taxpayers for Common Sense points out the way this tax benefit disproportionately benefits the fossil fuel industry, stating that “the IDC deduction only serves to subsidize the business generally by allowing certain taxpayers to avoid the capitalization rules applying to other taxpayers.”

Further, legislation passed earlier this year that removed tax credits for clean energy actually added a new tax credit for metallurgical coal. And just last month, Secretary Wright announced $625 million in grants to throw a lifeline to withering coal plants.

There’s no eschewing the facts: this is picking winners and losers. At a moment of skyrocketing demand, we need the market to decide how to meet that demand. And what does the market choose every time? The cheapest, quickest-to-build energy sources.

Here’s the truth: solar energy is the most cost-effective form of new electricity generation in the United States, even without subsidies. It’s fast to deploy, requires no fuel, and delivers predictable, American-made power to millions of Americans.

Solar is poised to stand entirely on its own. As federal incentives phase down, solar will remain the cheapest and quickest-to-market solution to meet America’s growing energy needs.

The sky’s the limit for the solar industry — but only if we let the free market, not politics, decide our energy future.