I think you are talking about a different sort of decentralization than libertarians talk about, maybe?

Libertarians want decentralized political/coercive power. When the government is paying for power generation in smaller amounts at larger numbers of locations that's not decentralizing the governments political/coercive power.

And again, I can't imagine a libertarian who when questioned would be ok with oil subsidies. Point them my way and I'll give them a stern talking to.