4 ms·
Perhaps, you have misunderstood the meaning of "marginal cost." It does not mean that there is zero total cost. Marginal cost is the cost of producing the next
by goodcanadian 4y ago
Perhaps, you have misunderstood the meaning of "marginal cost." It does not mean that there is zero total cost. Marginal cost is the cost of producing the next kWh. Once my solar panels are installed (not necessarily cheap at all), the marginal cost of producing power is essentially 0.
- typon 4y agoMaintenance of the power inverter, batteries, wiring, and the panels themselves means that marginal cost is not zero, and as long as we don't know the solution to entropy, will never be "essentially" zero.
- tuatoru 4y agoAll of those things happen the same, and cost the same amount, whether 10 kWh are produced or 11 kWh. The marginal cost of the last kWh is zero for these items. There is thermal wear on the power management and voltage step-up electronics, but it is small unless design parameters are exceeded in going to 11. So maybe those components would have to be replaced ten milliseconds earlier than otherwise.
- cinntaile 4y agoThose things need to be maintained so seldom that they won't be far from 0 though. Systems without moving parts are nice like that.
- victoro 4y agoSetting aside the article's mention of moderately intensive solutions like natural gas which has a very real and obvious cost per KWH, your panels will still need maintenance and eventual replacement (the current industry standard lifetime for a panel is 25-30 years), as will any peripheral systems required for the panels to work (batteries etc) and even the space they take up has an associated opportunity cost.
- primax 4y agoAgain, no one is saying that isn’t true. He’s saying that the marginal cost, the main inhibitor to rapid scaling, is likely to approach zero.
- victoro 4y agoWhy is the marginal cost of a KWH the main inhibitor to rapid scaling? Wouldn't the main inhibitor be the marginal cost of additional capacity? To put it another way, if my solar panel can currently support 10 GPUs running all day but I need to run 11, don't I need to add another solar panel?
- ianai 4y agoMarginal cost is the derivative of the cost function. Fixed costs drop out of the derivative. You’re confusing amortizing a fixed cost with marginal cost.
- neximo64 4y agoYou’ve basically mentioned it’s not zero since the cost of the spend on the solar panels would have a next best alternative and a hurdle rate. So each marginal kWh does have a cost, not to mention the depreciative factor.
- spaceman_2020 4y ago* provided you’re located in a region that has ample solar power. Turns out, a lot of the world doesn’t really live in perpetually sunny or windy places. The solar-wind cult would be hilarious if it wasn’t so tragic. Entire economies have suffered because they marched headfirst into solar and wind without understanding their own geographical limitations (prime example: Germany).