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Reading from Brealey, Myers, Marcus Fundamentals of Corporate Finance (sixth edition) - MidAmerican's Wind Power Project...

Reading from Brealey, Myers, Marcus Fundamentals of Corporate Finance (sixth edition) - MidAmerican's Wind Power Project p. 273

Does our government have a responsibility to subsidize these types of projects even though they may not ever be profitable? Why or why not?

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Yes, usually the government would subsidize such projects as they have social benefits attached to them. They may not be profitable but they shall provide for power for the citizens which has social benefits attached to it. Even though the project may not be profitable but social benefits are high, and they cannot be measured quantitatively. Hence government subsidizes them even if they are never profitable.

Another benefit is that this will provide a cleaner alternative source of power as opposed to power from fossil fuels. This shall reduce carbon footprint provided extra social benefit which again cannot be quantified. hence again government subsidizing such projects is beneficial

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