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> It seems like the entire solar industry is focused more on extracting government subsidies than on creating long term revenue streams. Some might argue this

> It seems like the entire solar industry is focused more on extracting government subsidies than on creating long term revenue streams. Some might argue this is the exact nature of government subsidies. People are always going to make choices in their economic self-interest. Either solar needs to be the most cost effective solution for their energy needs, or the government needs to artificially inflate the cost of other energy (or reduce any subsidies to other energy to make solar more competitive). Every time a hurricane knocks out a town's electric grid and federal funds are used to repair it, that's a subsidy. When government authority to exercise eminent domain acquires easements or land to erect power distribution, that's a subsidy. Not to mention utilities being absolved from responsibility for the pollution they create.

Fricken 8y ago
China threw massive subsidies at solar, and they readily admit there was a great deal of waste and graft, but now that the dust has settled China is the industry leader.
- rufusroflpunch 8y ago
  But there's no telling what the opportunity cost was. Likely far more massive than whatever short-term benefits from being an industry leader.
  - KirinDave 8y ago
    If there is no telling, then it's kind of pointless to speculate on its inefficiency.
krageon 8y ago
I don't think you've sufficiently proven the argument which the rest of your statements hinge on: "People are always going to make choices in their economic self-interest". It's an attractive (if somewhat cynical) point, but it's no more reasonable than any other generalisation. Not very.
- watwat1 8y ago
  It’s patently obvious. No sane individual will systematically go against his economic self interest.
- notfromhere 8y ago
  If anything, voting patterns in the US prove this wrong.
  - zaroth 8y ago
    Tax reform means my organically growing startup gets to keep 33% more of our profit to reinvest back into the company, which has meaningfully impacted our annual budget and growth trajectory. VC funded startups get the advantage of growing ahead of profit, and booking tax losses which they can carry forward. Bootstrapping means growth driven by profit, which necessitates paying income taxes on the ever growing cash balance which flows from growing revenues & expenses (e.g. always having 3 months operating expenses in the bank)
    - s73v3r_ 8y ago
      Ok. But the "working class" people who voted Trump in don't get to see any of those gains. They at best got a one time bonus, which is still taxed at higher rates, and in exchange, they get cuts to many of the services they rely on.
      - zaroth 8y ago
        The gains to the working class is seen in the lowest unemployment numbers ever, a rising workforce participation rate, and starting to see the first wage growth for the working class in decades. That’s because that extra 33% in our bank balance means more marketing spending, more inventory, more open reqs for hiring sale, marketing, support, and engineering, etc. etc. E.g. This WSJ post which is also on the front page: “U.S. Workers Get Biggest Pay Increase in Nearly a Decade” https://www.wsj.com/articles/u-s-employment-costs-rose-in-the-second-quarter-1533040473 https://www.wsj.com/articles/u-s-employment-costs-rose-in-th...
dv_dt 8y ago
> Every time a hurricane knocks out a town's electric grid and federal funds are used to repair it, that's a subsidy. When government authority to exercise eminent domain acquires easements or land to erect power distribution, that's a subsidy. This is anti-government fervor carried to absurdity. No man is an island. What is the point of government if not to provide care in disastrous situations? And yes this is the peoples self-interest in carrying on a stable society. I support this kind of "subsidy" 100%.
- paulddraper 8y ago
  I don't think linuxftw was necessarily saying that government intervention is inappropriate. They were saying that the nature of government intervention is to distort the underlying economics. It is therefore unsurprising when businesses grow up around these temporary distortions rather than long term business models. It's the "price" we pay for whatever upsides there are to the subsidy.
  - dv_dt 8y ago
    Then I support this intervention. This idea that there is some "pure" form of undisturbed economics that is practiced outside the framework of achieving some larger social objective is also an absurd myth.
    - WillPostForFood 8y ago
      It is OK to support the intervention, but it's helpful to be honest about what it is (subsidy) so we can have an honest discussion the tradeoffs.
      - dv_dt 8y ago
        Oh then, is the subsidy for fossil fuels and roads driving increased intensity of hurricane storms? If you think so then what should we do with the increased destruction of property who at perhaps only peripherally participated in that subsidy?
    - 8y ago
KirinDave 8y ago
> Some might argue this is the exact nature of government subsidies. I'm not sure why that's bad though. It's true it'd be nice if US science was unfettered by the constant funding-directed pressure to find novel ways to kill people (or support folks doing said killing), but it is true that it spurs research in a variety of areas. > Either solar needs to be the most cost effective solution for their energy needs, or the government needs to artificially inflate the cost of other energy (or reduce any subsidies to other energy to make solar more competitive). Solar's receiving less subsidy than most other forms of energy. The oil industry, in particular, receives massive subsidies (and military interventions abroad in some cases) and the current US government heavily favors the coal industry (which already receives a lot of monetary subsidy as well). SolarCity being somewhat unethical in defrauding sales is not unique to, you know, a subsidized business. It's a consequence of any insufficiently regulated industry where the penalty for fraud is less than the profit of fraud. It's a fundamental feature of capitalism when untethered from objective assessments of value. > People are always going to make choices in their economic self-interest. I hope people understand that this is actually a religious point, not a scientific one. The science says quite the opposite.
- linuxftw 8y ago
  > It's a consequence of any insufficiently regulated industry where the penalty for fraud is less than the profit of fraud. It's a fundamental feature of capitalism when untethered from objective assessments of value. That is not a feature or consequence of capitalism. Fraud exists in any economic system, and the punishments for fraud are independent of the economic system itself. > I hope people understand that this is actually a religious point, not a scientific one. The science says quite the opposite. Science can say whatever it wants, if you look at our world objectively, it's quite plain to see people are motivateed primarily by economic forces. For instance, in the following article [1] (top relevant, second overall google search result for 'why buy an electric car'): >Q: Why should someone should go out and buy an electric car right now? > A: They can make a huge contribution to reducing carbon dioxide emissions—that's the most important reason. There are advantages in terms of going into the carpool lane. Electric vehicles are becoming (price) competitive with internal combustion engines. In our report we looked at the life-cycle cost of ... electric cars, hybrid electric cars, gas-powered cars and we found that, for example, the Nissan Leaf and the Smart car are competitive right now even without (government) incentives. What's driving down the cost of EVs is the reduction in the cost of the battery. Another important point is that the maintenance is minimal. There are several reasons given. All but the first are clearly economic reasons meant to persuade people into buy an electric car. I believe this to be because, in the opinion of the answer, buying an electric vehicle has positive economic incentives that the reader might not recognize immediately, and they are providing a case for overall economic benefit to the purchaser. The first point is not immediately about economics, but I argue that it is indirectly. The best way to decrease your carbon footprint is to not have a car and to sleep outdoors. Of course, that is not an economically viable or desirable option for most people. These people have made a self-interested economic decision to own a personal conveyance that operates on public highways at the expense of carbon emissions. There will always be a cross section of personal motivations (tastes, preferences) and economic self interest. The wealthy can afford to pursue the former at the expense of the latter; the average person will be more adherent to economic self interest in for the future or marginal pursuance of the former. [1] https://phys.org/news/2018-02-shouldand-shouldntbuy-electric-car.html#jCp https://phys.org/news/2018-02-shouldand-shouldntbuy-electric...
Bjartr 8y ago
> People are always going to make choices in their economic self-interest. I would add that they will make choices in their understanding of their economic self-interest. People are not rational actors.
- rufusroflpunch 8y ago
  Rationality, in the economic sense, doesn't mean making objectively correct decisions as perceived from the outside. It means to make decisions in the furtherance of a particular subjective goal. Making decisions that later turn out to be counter to those ends does not mean that person was behaving irrationality, just that they were wrong. In other words, economically irrational actors are individuals who act consistently against their own self interest, even as they perceive it. Almost no one is irrational in that sense. It's a loose definition, but it's all that is needed to make markets functional.
  - dragonwriter 8y ago
    > It means to make decisions in the furtherance of a particular subjective goal. The particular subjective goal is “experienced utility”, and economic rationality not only presumes that that can be meaningfully summed across time but also that the decision made will be made with perfect information as to resulting utilities and disutility and maximize the net lifetime experienced utility.
    - testvox 8y ago
      Why would economic rationality assume that the decision made will be made with perfect information as to resulting utilities and disutility and maximize the net lifetime experienced utility? This seems like a non sequitur, and a really silly assumption. Wouldn't economic rationality assume that the decisions of actors are rational rather than based on perfect information about their consequences?
      - dragonwriter 8y ago
        > Why would economic rationality assume that the decision made will be made with perfect information as to resulting utilities and disutility and maximize the net lifetime experienced utility I didn't invent rational choice theory, so don't ask me to justify it. Ok, well, I'll take a stab at it—the whole concept is exquisitely well crafted as a basis for the argument that liberal (in the classical sense) economic, and even political, systems are ideal in terms of experienced human outcome. > Wouldn't economic rationality assume that the decisions of actors are rational rather than based on perfect information about their consequences? Economic rationality is defined to include both perfect information and optimality given that information, so there is no “instead of”—your two alternatives are different phrasings of the same thing.
Spooky23 8y ago
> People are always going to make choices in their economic self-interest. Why does 89 octane gasoline exist? The magic of solar city is simple -- they figured out how to market easy monthly payments for a big capital investment. People decide to go solar for all sorts of reasons, and financial is usually not the driver. I live in the northeast, and it's marginal value, you save like $20/mo in electric bills and are stuck with a lease on your roof. Many of my neighbors with solar could save $50/month with a much a $4,000 investment windows, and a few hundred in chaulk and spray foam.
- DiabloD3 8y ago
  89 and 93 octane isn't the right argument. You need to ask why does gasoline contaminated with ethanol still exist, when all it does is increase the cost of gasoline (per mile), decrease mileage (per gallon), and increase emissions (both per mile and gallon). Drivers would save tons of money if they'd refuse to buy it, we would just need to get enough of us together to get such a thing done.
  - soperj 8y ago
    to subsidize corn producers in the mid-west.
  - Spooky23 8y ago
    IIRC, it reduces certain noxious components of air pollution like particulates at the cost of more CO2
    - DiabloD3 8y ago
      It lowers actual octane rating, thus increasing air pollution ever so slightly. An engine designed entirely for ethanol, not one that just merely takes a mix but is meant for gasoline, would be higher efficiency and be worth it.
      - laurencerowe 8y ago
        Ethanol has a higher octane rating (113 RON) than petroleum, but is less energy dense (so lowers mpg.)

Fricken 8y ago

China threw massive subsidies at solar, and they readily admit there was a great deal of waste and graft, but now that the dust has settled China is the industry leader.

rufusroflpunch 8y ago
But there's no telling what the opportunity cost was. Likely far more massive than whatever short-term benefits from being an industry leader.
- KirinDave 8y ago
  If there is no telling, then it's kind of pointless to speculate on its inefficiency.

krageon 8y ago

I don't think you've sufficiently proven the argument which the rest of your statements hinge on: "People are always going to make choices in their economic self-interest". It's an attractive (if somewhat cynical) point, but it's no more reasonable than any other generalisation. Not very.

watwat1 8y ago
It’s patently obvious. No sane individual will systematically go against his economic self interest.
notfromhere 8y ago
If anything, voting patterns in the US prove this wrong.
- zaroth 8y ago
  Tax reform means my organically growing startup gets to keep 33% more of our profit to reinvest back into the company, which has meaningfully impacted our annual budget and growth trajectory. VC funded startups get the advantage of growing ahead of profit, and booking tax losses which they can carry forward. Bootstrapping means growth driven by profit, which necessitates paying income taxes on the ever growing cash balance which flows from growing revenues & expenses (e.g. always having 3 months operating expenses in the bank)
  - s73v3r_ 8y ago
    Ok. But the "working class" people who voted Trump in don't get to see any of those gains. They at best got a one time bonus, which is still taxed at higher rates, and in exchange, they get cuts to many of the services they rely on.
    - zaroth 8y ago
      The gains to the working class is seen in the lowest unemployment numbers ever, a rising workforce participation rate, and starting to see the first wage growth for the working class in decades. That’s because that extra 33% in our bank balance means more marketing spending, more inventory, more open reqs for hiring sale, marketing, support, and engineering, etc. etc. E.g. This WSJ post which is also on the front page: “U.S. Workers Get Biggest Pay Increase in Nearly a Decade” https://www.wsj.com/articles/u-s-employment-costs-rose-in-the-second-quarter-1533040473 https://www.wsj.com/articles/u-s-employment-costs-rose-in-th...

dv_dt 8y ago

> Every time a hurricane knocks out a town's electric grid and federal funds are used to repair it, that's a subsidy. When government authority to exercise eminent domain acquires easements or land to erect power distribution, that's a subsidy. This is anti-government fervor carried to absurdity. No man is an island. What is the point of government if not to provide care in disastrous situations? And yes this is the peoples self-interest in carrying on a stable society. I support this kind of "subsidy" 100%.

paulddraper 8y ago
I don't think linuxftw was necessarily saying that government intervention is inappropriate. They were saying that the nature of government intervention is to distort the underlying economics. It is therefore unsurprising when businesses grow up around these temporary distortions rather than long term business models. It's the "price" we pay for whatever upsides there are to the subsidy.
- dv_dt 8y ago
  Then I support this intervention. This idea that there is some "pure" form of undisturbed economics that is practiced outside the framework of achieving some larger social objective is also an absurd myth.
  - WillPostForFood 8y ago
    It is OK to support the intervention, but it's helpful to be honest about what it is (subsidy) so we can have an honest discussion the tradeoffs.
    - dv_dt 8y ago
      Oh then, is the subsidy for fossil fuels and roads driving increased intensity of hurricane storms? If you think so then what should we do with the increased destruction of property who at perhaps only peripherally participated in that subsidy?
  - 8y ago

KirinDave 8y ago

> Some might argue this is the exact nature of government subsidies. I'm not sure why that's bad though. It's true it'd be nice if US science was unfettered by the constant funding-directed pressure to find novel ways to kill people (or support folks doing said killing), but it is true that it spurs research in a variety of areas. > Either solar needs to be the most cost effective solution for their energy needs, or the government needs to artificially inflate the cost of other energy (or reduce any subsidies to other energy to make solar more competitive). Solar's receiving less subsidy than most other forms of energy. The oil industry, in particular, receives massive subsidies (and military interventions abroad in some cases) and the current US government heavily favors the coal industry (which already receives a lot of monetary subsidy as well). SolarCity being somewhat unethical in defrauding sales is not unique to, you know, a subsidized business. It's a consequence of any insufficiently regulated industry where the penalty for fraud is less than the profit of fraud. It's a fundamental feature of capitalism when untethered from objective assessments of value. > People are always going to make choices in their economic self-interest. I hope people understand that this is actually a religious point, not a scientific one. The science says quite the opposite.

linuxftw 8y ago
> It's a consequence of any insufficiently regulated industry where the penalty for fraud is less than the profit of fraud. It's a fundamental feature of capitalism when untethered from objective assessments of value. That is not a feature or consequence of capitalism. Fraud exists in any economic system, and the punishments for fraud are independent of the economic system itself. > I hope people understand that this is actually a religious point, not a scientific one. The science says quite the opposite. Science can say whatever it wants, if you look at our world objectively, it's quite plain to see people are motivateed primarily by economic forces. For instance, in the following article [1] (top relevant, second overall google search result for 'why buy an electric car'): >Q: Why should someone should go out and buy an electric car right now? > A: They can make a huge contribution to reducing carbon dioxide emissions—that's the most important reason. There are advantages in terms of going into the carpool lane. Electric vehicles are becoming (price) competitive with internal combustion engines. In our report we looked at the life-cycle cost of ... electric cars, hybrid electric cars, gas-powered cars and we found that, for example, the Nissan Leaf and the Smart car are competitive right now even without (government) incentives. What's driving down the cost of EVs is the reduction in the cost of the battery. Another important point is that the maintenance is minimal. There are several reasons given. All but the first are clearly economic reasons meant to persuade people into buy an electric car. I believe this to be because, in the opinion of the answer, buying an electric vehicle has positive economic incentives that the reader might not recognize immediately, and they are providing a case for overall economic benefit to the purchaser. The first point is not immediately about economics, but I argue that it is indirectly. The best way to decrease your carbon footprint is to not have a car and to sleep outdoors. Of course, that is not an economically viable or desirable option for most people. These people have made a self-interested economic decision to own a personal conveyance that operates on public highways at the expense of carbon emissions. There will always be a cross section of personal motivations (tastes, preferences) and economic self interest. The wealthy can afford to pursue the former at the expense of the latter; the average person will be more adherent to economic self interest in for the future or marginal pursuance of the former. [1] https://phys.org/news/2018-02-shouldand-shouldntbuy-electric-car.html#jCp https://phys.org/news/2018-02-shouldand-shouldntbuy-electric...

Bjartr 8y ago

> People are always going to make choices in their economic self-interest. I would add that they will make choices in their understanding of their economic self-interest. People are not rational actors.

rufusroflpunch 8y ago
Rationality, in the economic sense, doesn't mean making objectively correct decisions as perceived from the outside. It means to make decisions in the furtherance of a particular subjective goal. Making decisions that later turn out to be counter to those ends does not mean that person was behaving irrationality, just that they were wrong. In other words, economically irrational actors are individuals who act consistently against their own self interest, even as they perceive it. Almost no one is irrational in that sense. It's a loose definition, but it's all that is needed to make markets functional.
- dragonwriter 8y ago
  > It means to make decisions in the furtherance of a particular subjective goal. The particular subjective goal is “experienced utility”, and economic rationality not only presumes that that can be meaningfully summed across time but also that the decision made will be made with perfect information as to resulting utilities and disutility and maximize the net lifetime experienced utility.
  - testvox 8y ago
    Why would economic rationality assume that the decision made will be made with perfect information as to resulting utilities and disutility and maximize the net lifetime experienced utility? This seems like a non sequitur, and a really silly assumption. Wouldn't economic rationality assume that the decisions of actors are rational rather than based on perfect information about their consequences?
    - dragonwriter 8y ago
      > Why would economic rationality assume that the decision made will be made with perfect information as to resulting utilities and disutility and maximize the net lifetime experienced utility I didn't invent rational choice theory, so don't ask me to justify it. Ok, well, I'll take a stab at it—the whole concept is exquisitely well crafted as a basis for the argument that liberal (in the classical sense) economic, and even political, systems are ideal in terms of experienced human outcome. > Wouldn't economic rationality assume that the decisions of actors are rational rather than based on perfect information about their consequences? Economic rationality is defined to include both perfect information and optimality given that information, so there is no “instead of”—your two alternatives are different phrasings of the same thing.

Spooky23 8y ago

> People are always going to make choices in their economic self-interest. Why does 89 octane gasoline exist? The magic of solar city is simple -- they figured out how to market easy monthly payments for a big capital investment. People decide to go solar for all sorts of reasons, and financial is usually not the driver. I live in the northeast, and it's marginal value, you save like $20/mo in electric bills and are stuck with a lease on your roof. Many of my neighbors with solar could save $50/month with a much a $4,000 investment windows, and a few hundred in chaulk and spray foam.

DiabloD3 8y ago
89 and 93 octane isn't the right argument. You need to ask why does gasoline contaminated with ethanol still exist, when all it does is increase the cost of gasoline (per mile), decrease mileage (per gallon), and increase emissions (both per mile and gallon). Drivers would save tons of money if they'd refuse to buy it, we would just need to get enough of us together to get such a thing done.
- soperj 8y ago
  to subsidize corn producers in the mid-west.
- Spooky23 8y ago
  IIRC, it reduces certain noxious components of air pollution like particulates at the cost of more CO2
  - DiabloD3 8y ago
    It lowers actual octane rating, thus increasing air pollution ever so slightly. An engine designed entirely for ethanol, not one that just merely takes a mix but is meant for gasoline, would be higher efficiency and be worth it.
    - laurencerowe 8y ago
      Ethanol has a higher octane rating (113 RON) than petroleum, but is less energy dense (so lowers mpg.)