Fracking Hell...

Yes, subsidies do encourage diversity, in very specific ways- providing a subsidy for solar panels encourages people to buy them.

With the recent effort in this direction it has encouraged the middle classes who have a) the capex and b) the roof to do so- funded by a national increase in the cost of electricity.

As a percentage of their household budget the cost of electricity has gone down- a result for the middle class solar panel owner.

However, their power bills have not gone down due to returning "clean" power to the grid, or generating their own green power, they have gone down because everyone else is paying part of their bill.

i.e. the people in high rise flat-blocks, paying more than 10% of their household income to energy companies are very charitably subsidising this so that the chap with solar panels can put more money towards his holiday in Tuscany.

Neil - don't get me started on photovoltaic solar. it remains unsustainable, the technology has more embedded energy than can ever be generated in its lifetime, and they contain loads of nasties that make them a nightmare to dispose of at their end of life. Subsidies for this type of small scale generation is sadly little more than greenwash - and misguided at that.
Solar hot water on the other hand can be very useful in many climates and requires little more investment than a length of black rubber hose (and a roof, of course).

The government subsidy I'm talking about is on a large scale - £billions to help build offshore wind farms and nuclear power stations.

Policies aside, you can easily generate more than you use with a few panels on a south facing roof.

You don't even need to be middle class.