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I'm super excited about all of the great stuff happening in solar recently, but whenever I read about the economics of home solar, I'm also always reminded of h

I'm super excited about all of the great stuff happening in solar recently, but whenever I read about the economics of home solar, I'm also always reminded of how stacked the deck is for wealthy people vs. poor folks. There's a very large federal tax credit for solar investment. That's great...but, people who can't afford their own home get no such credit, and there's no way for them to get such a credit. That's a super common trait for lot of incentives; they go to people who need them least. And, the people who are getting these incentives, are also using a lot more power (bigger houses, more power), and so even with solar, their huge houses may still be contributing more to emissions than the poor folks who aren't getting any tax breaks living in apartments or rental properties. I don't really have any answers on this, I just think it doesn't get talked about enough.

drozycki 10y ago
Maybe it would help to think of the credit as benefiting the solar industry more than wealthy people. It's a long road for new tech to reach economies of scale. If society has an interest in reaching that inflection point than the subsidy could be money well spent. Poor people will benefit when the price of the roof falls further; it may never have reached that point without early subsidy. Perhaps it would be more equitable if Tesla received the subsidy directly. But that places the government in the business of choosing winners without the market signals of who would actually succeed if given the subsidy. Politically that's such a minefield. And no one ever lost votes for promoting a tax cut.
- SwellJoe 10y ago
  How about a tax credit for lower power consumption, instead of subsidizing any one path for achieving it?
mundo 10y ago
This is tautological; the reason poor people don't get a lot of tax breaks is because they don't pay a lot of taxes. The government does spend a lot of money helping poor people, but not via tax credits.
- catawbasam 10y ago
  It's not a tautology because tax credits aren't the only possibility for providing incentives. Imagine you worked for $10/hour, and somehow got put in charge of designing the incentives. Do you think they would look like this? I don't.
  - mundo 10y ago
    The tautology is in only looking at the subset of spending that's done through incentives, and then complaining that it disproportionately goes to people buying expensive stuff. That's what incentive means in this context: incentive to buy expensive stuff. Anyway, you're coming at this all wrong. If I was in charge of designing this program, my mandate would not be to help poor people or rich people, it would be to increase solar power. How do you increase solar power? By paying for part of it. Who benefits? Whoever's buying it. Who pays to install solar power? Not poor people.
  - mundo 10y ago
    Or here's another way to look at it: What's the whole point of having a solar power incentive? To get more solar power. Now suppose we changed the law governing solar power incentives to exclude rich people (or tall people, or right-handed people, or any group of people). What would happen? Less solar power. That might be a desirable outcome, if you are more opposed to rich people getting tax breaks than you are to fossil fuels. But in that case, why not just raise taxes on rich people, and leave the solar incentive out of this?
- SwellJoe 10y ago
  I'm speaking of incentivizing reducing power usage in the general case, not merely tax credits. The current solution is "let's give wealthy people more money to play with" (to questionable benefit to the general welfare). I should be clear I'm not saying I oppose tax credits for reducing usage; I'm just saying that poor people aren't getting the same kinds of benefits for using less power, even though they are using less power than the wealthy folks getting kickbacks. And, again, I don't have ideal answers. But, I think there's a problem with the government consistently serving wealthy folks, even when those folks are living in much larger houses and consuming far more resources. Should a person with a 4000 sq ft house, consuming 5x the power of a lower income family in an 800 sq ft apartment, really be getting paid off to reduce their consumption? If we're serious about the problem of climate change, energy independence, etc., we have to start looking at the actual numbers. If five low-income families are consuming the same resources as one wealthy family...what needs to change to bring the 5x family's consumption down? Solar incentives are one of the options; but, again, they serve only the wealthy (and, as far as I know, most solar installations do not replace the entire household usage, and only reduce it by 30-50%). That outsized power consumer is costing everyone more in terms of what it will cost to respond to climate change. The question is why are the wealthy being rewarded when they're still consuming more than their poorer neighbors (well, probably not actually neighbors...the poor folks are on the other side of town due to zoning laws). And, on another "class war" theme, the poorest people are the ones being hit hardest and soonest by the effects of climate change. The multiple "100 year record-setting flood" events in Austin destroyed poor southeastern neighborhoods twice in the past five years. Those were the lowest cost neighborhoods, and decisions were made by the Army Corps of Engineers to protect more expensive homes, and ignore the risks to the poorer neighborhoods. Lousiana, Florida, the Carolinas, have all had major weather events in the past several years (not all can be proven to be the result of climate change, but the severity and frequency seems clearly on an upward trend) and the impact has been predominantly borne by the poor. OK...I went off on a bit of tear there. My point is that I feel a certain discomfort at how readily environmental causes are used to strengthen the position of those who are already wealthy and already relatively safe from environmental destruction, while the folks most likely to be impacted are invisible.

drozycki 10y ago

Maybe it would help to think of the credit as benefiting the solar industry more than wealthy people. It's a long road for new tech to reach economies of scale. If society has an interest in reaching that inflection point than the subsidy could be money well spent. Poor people will benefit when the price of the roof falls further; it may never have reached that point without early subsidy. Perhaps it would be more equitable if Tesla received the subsidy directly. But that places the government in the business of choosing winners without the market signals of who would actually succeed if given the subsidy. Politically that's such a minefield. And no one ever lost votes for promoting a tax cut.

SwellJoe 10y ago
How about a tax credit for lower power consumption, instead of subsidizing any one path for achieving it?

mundo 10y ago

This is tautological; the reason poor people don't get a lot of tax breaks is because they don't pay a lot of taxes. The government does spend a lot of money helping poor people, but not via tax credits.

catawbasam 10y ago
It's not a tautology because tax credits aren't the only possibility for providing incentives. Imagine you worked for $10/hour, and somehow got put in charge of designing the incentives. Do you think they would look like this? I don't.
- mundo 10y ago
  The tautology is in only looking at the subset of spending that's done through incentives, and then complaining that it disproportionately goes to people buying expensive stuff. That's what incentive means in this context: incentive to buy expensive stuff. Anyway, you're coming at this all wrong. If I was in charge of designing this program, my mandate would not be to help poor people or rich people, it would be to increase solar power. How do you increase solar power? By paying for part of it. Who benefits? Whoever's buying it. Who pays to install solar power? Not poor people.
- mundo 10y ago
  Or here's another way to look at it: What's the whole point of having a solar power incentive? To get more solar power. Now suppose we changed the law governing solar power incentives to exclude rich people (or tall people, or right-handed people, or any group of people). What would happen? Less solar power. That might be a desirable outcome, if you are more opposed to rich people getting tax breaks than you are to fossil fuels. But in that case, why not just raise taxes on rich people, and leave the solar incentive out of this?
SwellJoe 10y ago
I'm speaking of incentivizing reducing power usage in the general case, not merely tax credits. The current solution is "let's give wealthy people more money to play with" (to questionable benefit to the general welfare). I should be clear I'm not saying I oppose tax credits for reducing usage; I'm just saying that poor people aren't getting the same kinds of benefits for using less power, even though they are using less power than the wealthy folks getting kickbacks. And, again, I don't have ideal answers. But, I think there's a problem with the government consistently serving wealthy folks, even when those folks are living in much larger houses and consuming far more resources. Should a person with a 4000 sq ft house, consuming 5x the power of a lower income family in an 800 sq ft apartment, really be getting paid off to reduce their consumption? If we're serious about the problem of climate change, energy independence, etc., we have to start looking at the actual numbers. If five low-income families are consuming the same resources as one wealthy family...what needs to change to bring the 5x family's consumption down? Solar incentives are one of the options; but, again, they serve only the wealthy (and, as far as I know, most solar installations do not replace the entire household usage, and only reduce it by 30-50%). That outsized power consumer is costing everyone more in terms of what it will cost to respond to climate change. The question is why are the wealthy being rewarded when they're still consuming more than their poorer neighbors (well, probably not actually neighbors...the poor folks are on the other side of town due to zoning laws). And, on another "class war" theme, the poorest people are the ones being hit hardest and soonest by the effects of climate change. The multiple "100 year record-setting flood" events in Austin destroyed poor southeastern neighborhoods twice in the past five years. Those were the lowest cost neighborhoods, and decisions were made by the Army Corps of Engineers to protect more expensive homes, and ignore the risks to the poorer neighborhoods. Lousiana, Florida, the Carolinas, have all had major weather events in the past several years (not all can be proven to be the result of climate change, but the severity and frequency seems clearly on an upward trend) and the impact has been predominantly borne by the poor. OK...I went off on a bit of tear there. My point is that I feel a certain discomfort at how readily environmental causes are used to strengthen the position of those who are already wealthy and already relatively safe from environmental destruction, while the folks most likely to be impacted are invisible.