5 ms·

They're incentivizing domestic production, but at two costs: 1) environmental, from shipping stuff around the world several times (parts into the US to SolarCit

by magduf 7y ago

They're incentivizing domestic production, but at two costs: 1) environmental, from shipping stuff around the world several times (parts into the US to SolarCity, cells out of the US to final assemblers, assembled panels back into the US for final sale and use), and 2) cost to domestic purchasers. Finally there's 3) reduced demand for solar panels due to higher costs, which means we don't produce as much power this way, and instead use other means (generally fossil fuel). All in all, it's a terrible deal for us. If we're going to shoot ourselves in the foot on something made abroad, I propose we do it for smartphones. Slap a giant tariff on any cellphone made outside the US, like 1000%. Let's see how Americans like being stuck with their aging smartphones or having to spend $10k for a new one. Oh yeah, make sure the tariff applies to the LCD/OLED screens too, since we can't make those here.

icegreentea2 7y ago
I think there's a fun angle we could take on this. One could reasonably argue that large solar deployment in major industrialize countries is unlikely to occur "in time" without some sort of government prodding (of some sort). And when that time comes, it's gonna be big. We're going to need crank out solar panels and wind turbines like mad. In that context, basically everything we've done so far is basically warm up. Like 2% of US electrical production is from solar. We're gonna need to install like 25-100x the current installation base to do what we want. A reasonable assumption to make is that by the time the USA gets around to doing that, most other rich countries will be doing that too. This means that global supply is going to be challenged. This means that having the domestic capacity to grow this production is key. This means that being somewhat inefficient at this stage to build knowledge-base and competency in key parts of the supply and operations chain may actually be the long-term optimal solution. Of course, this is all just conjecture.
- zaroth 7y ago
  Look at “Swanson’s Law” for insight into solar economics. We’re at the order of magnitude where widespread deployment is inevitable. It took a lot of learning curve to get there, there’s barely another order of magnitude left to be had. There are also the supporting infrastructure that needed to get there, such as battery/storage tech and smarter grids to handle the variable load. Governments around the world have put hundreds of billions of dollars into solar R&D. Last year we had 500GW of solar and 600GW of wind, and added 100GW of solar. We should add more than 100GW of new generation to that this year. It’s pretty good progress! I think global generation is about 15TW, and of course solar doesn’t generate 24/7, so there’s plenty of room to grow.
zaroth 7y ago
Just to put it in perspective, the 30% tariff on imported cells resulted in a net impact of about a 5% cost increase to the end consumer. [1] The basic macroeconomic equations always tilt to the side of free trade. I majored in economics. The basic theories work in an ideal and simplified world, and don't account for all the variables. The "hollowing out" of American manufacturing was a result of globalization spurred by free trade. Any government intervention which isn't a subsidy is going to be less than ideal theoretically, but in a geopolitical reality can still be the right choice. And to be sure, both the tax credit and net metering still provide a huge government subsidy for adding solar generation. [1] - https://news-media.energysage.com/wp-content/uploads/2018/05/Price_Impact_Solar_Tariff-1024x555.png https://news-media.energysage.com/wp-content/uploads/2018/05...
- sbierwagen 7y ago
  Free trade is optimal... assuming you're optimizing for the greatest number of goods manufactured at the lowest price. Given that all the developed economies have been demand-constrained since World War 2, that might not actually be the best variable to optimize for.
  - arcticfox 7y ago
    That's an interesting take that I (total non-economist) had never considered, where does the demand-constrained philosophy lead to in terms of variables to optimize for, and eventually, policies?
    - rogerkirkness 7y ago
      There's no such thing as demand constraints if you are talking about the whole economy: the supply of money is the constraint.
- Retric 7y ago
  > basic macroeconomic equations Only in oversimplified models. Food production for example is generally a low margin business. However, that’s only the case with a surplus. Price shocks can wipe away even decades of minor savings very quickly. Free trade creates more centralized production which is more likely to result in such price spikes. Thailand flooding resulting in a HDD prices doubling is a very recent example.
Nasrudith 7y ago
Really the Trump tarrifs havr been more moronic than usual in being more on raw materials and parts instead of finished products. That is literally exactly backwards for how tarriffs are supposed to be done. It also panders to rural extractives and low complexity manufacturing so there may be demagoguery to this massive stupidity.

by magduf 7y ago

icegreentea2 7y ago

I think there's a fun angle we could take on this. One could reasonably argue that large solar deployment in major industrialize countries is unlikely to occur "in time" without some sort of government prodding (of some sort). And when that time comes, it's gonna be big. We're going to need crank out solar panels and wind turbines like mad. In that context, basically everything we've done so far is basically warm up. Like 2% of US electrical production is from solar. We're gonna need to install like 25-100x the current installation base to do what we want. A reasonable assumption to make is that by the time the USA gets around to doing that, most other rich countries will be doing that too. This means that global supply is going to be challenged. This means that having the domestic capacity to grow this production is key. This means that being somewhat inefficient at this stage to build knowledge-base and competency in key parts of the supply and operations chain may actually be the long-term optimal solution. Of course, this is all just conjecture.

zaroth 7y ago
Look at “Swanson’s Law” for insight into solar economics. We’re at the order of magnitude where widespread deployment is inevitable. It took a lot of learning curve to get there, there’s barely another order of magnitude left to be had. There are also the supporting infrastructure that needed to get there, such as battery/storage tech and smarter grids to handle the variable load. Governments around the world have put hundreds of billions of dollars into solar R&D. Last year we had 500GW of solar and 600GW of wind, and added 100GW of solar. We should add more than 100GW of new generation to that this year. It’s pretty good progress! I think global generation is about 15TW, and of course solar doesn’t generate 24/7, so there’s plenty of room to grow.

zaroth 7y ago

Just to put it in perspective, the 30% tariff on imported cells resulted in a net impact of about a 5% cost increase to the end consumer. [1] The basic macroeconomic equations always tilt to the side of free trade. I majored in economics. The basic theories work in an ideal and simplified world, and don't account for all the variables. The "hollowing out" of American manufacturing was a result of globalization spurred by free trade. Any government intervention which isn't a subsidy is going to be less than ideal theoretically, but in a geopolitical reality can still be the right choice. And to be sure, both the tax credit and net metering still provide a huge government subsidy for adding solar generation. [1] - https://news-media.energysage.com/wp-content/uploads/2018/05/Price_Impact_Solar_Tariff-1024x555.png https://news-media.energysage.com/wp-content/uploads/2018/05...

sbierwagen 7y ago
Free trade is optimal... assuming you're optimizing for the greatest number of goods manufactured at the lowest price. Given that all the developed economies have been demand-constrained since World War 2, that might not actually be the best variable to optimize for.
- arcticfox 7y ago
  That's an interesting take that I (total non-economist) had never considered, where does the demand-constrained philosophy lead to in terms of variables to optimize for, and eventually, policies?
  - rogerkirkness 7y ago
    There's no such thing as demand constraints if you are talking about the whole economy: the supply of money is the constraint.
Retric 7y ago
> basic macroeconomic equations Only in oversimplified models. Food production for example is generally a low margin business. However, that’s only the case with a surplus. Price shocks can wipe away even decades of minor savings very quickly. Free trade creates more centralized production which is more likely to result in such price spikes. Thailand flooding resulting in a HDD prices doubling is a very recent example.

Nasrudith 7y ago

Really the Trump tarrifs havr been more moronic than usual in being more on raw materials and parts instead of finished products. That is literally exactly backwards for how tarriffs are supposed to be done. It also panders to rural extractives and low complexity manufacturing so there may be demagoguery to this massive stupidity.