This evaluation has a strong bearing on the justification for continued public-sector support for the development of renewable technologies. Prior and sometimes faltering support has taken a variety of forms, from research funding to subsidies for investment and production. The public may well ask what the return has been on these investments. We do not provide evidence or attempt to evaluate the efficacy of public- sector programs as such, nor can we attribute the changes in technological development to government policies in general. The changes we observe may or may not be attributable to public-sector programs. But the claim that renewable technologies have failed to meet goals that influenced the nature of public-sector programs can be addressed directly.

A critical question is how to measure the success of renewable technologies. We propose two such measures. One is their performance relative to projections for their contribution to meeting electricity demand. A second is their performance relative to projections of cost. Regarding the first, renewable technologies seem to have failed in general, at least in terms of their contribution to grid-connected electricity generation, with perhaps a couple of exceptions (notably biomass).⁴³ With respect to the second measure, renewables seem to be a success. The development of renewable technologies obviously has not occurred while the world otherwise stood still. In fact, over the time horizon we evaluated, dramatic changes have characterized energy markets in general. The ultimate impacts of these changes have been mostly favorable for electricity consumers; they have also been frustratingly disappointing for the fate of renewable technologies. The price of generation from conventional technologies has fallen precipitously, largely due to changes in fuel markets. This has raised the hurdle over which renewable technologies must pass in order to penetrate the electricity market in a significant way.

We view the confluence of changes in energy markets as an indication of the success of an array of changes in public policy, including, in particular, regulatory reform and deregulation of key energy markets and related industries such as railroads. Ironically, the perceived failure of renewable technologies to contribute importantly to electricity generation today is to a significant degree attributable to these successes.

This does not imply that public-sector support for renewable technologies has been misplaced. Public-sector financial incentives for renewable technologies (as well as other energy technologies) can be viewed as a precaution against rising energy prices, vulnerability to disruptions of foreign energy supply, and environmental concerns. After all, fire insurance is not judged as successful from the perspective of whether or not a person’s house actually burns down. Similarly, the success of public-sector support for renewable technologies should not be viewed from the perspective of largely unrelated outcomes.

The most important measure of success would seem to us to be the cost of electricity generated from renewable technologies compared with the expectations that served as the justification for public-sector support. According to this measure, renewable technologies have met the goals set for them, and could be considered an important component of an ongoing movement toward sound energy policy. Whether the level of support has been adequate or should continue we leave to other investigators.

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