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Solar is a market for (financial) lemons

95 points by Timothee 3y ago

vegetablepotpie 3y ago
This is a well written article, that makes the point that rooftop solar is good, but a market based approach to roll our it leads to anti-social outcomes like scammers installing substandard systems consumers pay through the nose for. Still, I would like to see some solutions articulated. Should we be promoting solar installation by non-profits? Direct government financed solar installation? Or abandoning rooftop and promoting community solar?
- philipkglass 3y ago
  Larger scale ground mounted solar looks like it will always beat rooftop solar in terms of energy produced per dollar of investment. There are some cases where rooftop solar can save money by eliminating the need for a grid connection altogether (remote rural properties) but that's a tiny market compared to current suburban-focused rooftop solar businesses. Ground mounted solar has the following benefits over rooftop solar: - Much less permitting overhead per megawatt of capacity installed - Safer and faster installation process (no risk of workers falling off rooftops, uniform rows of panels are easier to install) - Lower hardware costs for inverters (since the units are larger) - Easier to orient panel installation for optimum sunlight gathering, so a unit of capacity generates more electricity each year - Easier to clean panels regularly, so a unit of capacity generates more electricity each year - Possibility to use single axis sun tracking mounts for panels, so a unit of capacity generates more electricity each year Rooftop solar has the following benefits over ground mounted solar: - No additional consumption of land - Slight reduction in transmission and distribution costs, since more electricity is generated directly at the site of consumption These benefits are comparatively minuscule. A least-cost, fastest-progress plan for decarbonization would have the solar component heavily weighted toward large scale ground mounted projects. The additional money that would otherwise be spent on rooftop solar is better invested in all sorts of other things: wind farms, battery storage, insulation retrofits, heat pump replacements for gas heating...
  - ldbooth 3y ago
    Generally agree, though let's be real that transmission and distribution losses for ground mount solar are not slight, they are in the 30-40% range, like all utility T&D.
    - philipkglass 3y ago
      That's much too high an estimate, at least for the United States: How much electricity is lost in electricity transmission and distribution in the United States? The U.S. Energy Information Administration (EIA) estimates that annual electricity transmission and distribution (T&D) losses averaged about 5% of the electricity transmitted and distributed in the United States in 2018 through 2022. https://www.eia.gov/tools/faqs/faq.php?id=105&t=3 https://www.eia.gov/tools/faqs/faq.php?id=105&t=3
    - kwhitefoot 3y ago
      That's just outright false. Where did you get it from.
      - ldbooth 3y ago
        I can't find a link so I'll explain it... Single high voltage transformers approach the 6-8% at full load... Not to mention the wire losses and other transformers in the system minimum 3-5). The number you quoted from the EIA is not accurate. See this Nameplate Z% (impedance aka losses) of an ABB 20MVA transformer: https://images.app.goo.gl/hXNTWAv1xnu83znQ7 https://images.app.goo.gl/hXNTWAv1xnu83znQ7 It is higher as the transformers get larger. Correction tho... 30-40% includes the losses from generation, not just T&D. And if you keep searching the EIA quoted that at 34%.
        kwhitefoot 3y ago
        > The number you quoted from the EIA I didn't quote any numbers.
  - lancewiggs 3y ago
- jokethrowaway 3y ago
  I don't see how you can say government subsidies are a "market based" approach Why not try to just NOT create incentives and let consumers choose?
sufimalang 3y ago
That’s just the nature of western capitalism.
- rgmerk 3y ago
  Australian capitalism isn’t that different to American capitalism, and the interaction of government incentives and market players has produced all manner of disasters here too (child and aged care are but two examples). But in the case of the solar market things have turned out dramatically differently. The Australian rooftop solar market has worked so well that a large part of the market is now unsubsidised.
- rstuart4133 3y ago
  > That’s just the nature of western capitalism. I'm also an Australian, and I think rgmerk is bang on. It's not the nature of all capitalism - just the USA style of it, and only in some instances. It seems to arise from the USA's love affair with free markets, or perhaps distrust of governments. They are two sides of the same coin, because distrust of government means they don't trust them to put the rules in place require to create competitive markets. For clarity, not all markets are equal. A monopoly is a kind of market for instance, but it's one that favours the suppliers. As other comments here have pointed out, some markets can self-destruct. A personal example is I refused to purchase SD Cards off suppliers like Ebay because fraud was so rampant, and it was impossible to figure which sellers were genuine. Later, SD Cards disappear from Ebay from a while - ie the market collapsed. I bought my SD Cards from stores instead, so that market (for an identical good) worked fine. A competitive market is one where there are lots of buyers, lots of sellers, free flow of information - in general no power imbalances. They are surprisingly fragile. Government intervention is often required to create them. An example of such in intervention is the EU changing the rules for software, effectively saying software must do what it promises on the side of the box. (Currently software typically has shrink wrap licences that disclaim all liability if it doesn't work.) In typical fashion, a lot of what appeared to be USA posters here decried the the unnecessary impost on business, and promptly predicted all software producers would move their operations to the USA. Perhaps they will, but businesses can't survive without customers and it's just as likely the customers will doing their purchasing in the EU when they can.
collaborative 3y ago
I got my roof mounted solar by saving for 3 years, getting multiple quotes, and going with what I thought was sensible. At current rates it will pay itself off in 9 years. It's not a great investment but also good for the environment. I wouldn't recommend borrowing for it. Just save for it if you can
- Retric 3y ago
  Good luck finding a 25 year bond with even close to that rate, risk profile, that also pays after tax returns.
- toomuchtodo 3y ago
  I have solar on all of my properties (primary, secondaries, rentals), but there is a lot of peril in the residential solar install market. Below are some of my observations on the topic from my experience. You can install on asphalt shingle roofing, but I don't recommend it; unless aligned with your roof replacement cycle, you're going to be paying thousands to remove and reinstall the system (racking and panels) to reroof when the time comes. Install solar on your roof if the roofing material will outlive the initial solar lifetime (~25-30 years). I love standing seam metal roofs for this, as there are friction mounting systems where you do not need to penetrate the roof to mount the racking and PV panels; $$$ but worth it imho. If your roof is coming up for replacement, do not install until replacement has occurred. Installers are fly by night (lots of sales->subcontractor to install relationships) and it is very likely they won't be around to maintain the system; the only mitigation for this is to find a vendor who is also a roofer or some other business that can buffer from the cyclic nature of residential solar (cyclic from PV panel commodity costs and government incentives). If you're capable, get certified by the inverter manufacturer to get installer access to your system (Enphase University [1] or the like). Get multiple quotes from installers [2] (a coop buying org is also a great option if available in your area [3] [4]), compare on equipment and price per watt. Research what your interconnect agreement with your utility looks like. 1:1 net metering is best, everything else less so. Net metering vs something else will govern system sizing and panel layout/direction. No batteries unless your grid is unreliable and you have the economic tolerance for it, or there are generous incentives from your state and utility. No PPAs or leases, they are economically inferior with the cost of systems having fallen so much and can make a property transfer transaction more difficult. As you mention, borrowing for this is economically inefficient unless you can get a long duration loan at something like ~3%. It is a great equivalent of an after tax bond return as Retric mentions, but you must do your homework [3]; it is not turn key unfortunately. [1] https://university.enphase.com/ https://university.enphase.com/ [2] https://www.energysage.com/ https://www.energysage.com/ [3] https://www.energy.gov/eere/solar/articles/purchasing-power-going-solar-through-cooperatives https://www.energy.gov/eere/solar/articles/purchasing-power-... [4] https://www.solarunitedneighbors.org/the-ultimate-solar-co-op-guide/co-op-guide-whats-a-solar-co-op/ https://www.solarunitedneighbors.org/the-ultimate-solar-co-o... [5] https://www.reddit.com/r/solar/wiki/homeownerguide#/c/purple https://www.reddit.com/r/solar/wiki/homeownerguide#/c/purple
a1371 3y ago
Highly opinionated article void of facts. Reaching the conclusion that the government should install solar, not seeing the fallacy in that argument. Governments are also optimization machines that connects the opinion of voters and interest groups, to action. What they spend on is not based on objective good, it's based on what the public opinion is that year. Most people would rather money going into low income housing and fighting homelessness. So the system will end up underfunded and that's assuming if the gov is efficient. I say that as a socialist, if the market is bad, regulate it.
- civilized 3y ago
  Well-covered ground in public choice theory https://en.m.wikipedia.org/wiki/Public_choice https://en.m.wikipedia.org/wiki/Public_choice
- sp332 3y ago
  I don't think the argument is that the government should install all solar. But if they're going to put all this money into it, they should put the money into just installing it instead of these gameable incentives.
jokethrowaway 3y ago
I love how the author blames the market and then goes on to explain the government created subsidies in the first place. If you let the market do his thing the growth would have matched exactly what consumers wanted. We also had some moderate subsidies in my EU country but we didn't get fast salesmen and crappy products. The quality was reasonable. I suspect this happened because the subsidies were not large enough to warrant the business model. We, the middle class taxpayers, just gave a bunch of free money to the people who own houses and who were smart enough to buy solar panels - which happened to be quite rich already.
- deleted 3y ago
  [deleted]
ChumpGPT 3y ago
I dreaming but man would I like a solar system that I could roll out like a 20 x 60 carpet in my backyard and connect it to a system to provide power or charge a battery pack. Otherwise fixed installation is to costly for me.
kwhitefoot 3y ago
Surely the fault is in the scammers not the market.
- Karellen 3y ago
  The point of "lemons" is that for some markets, scammers drive out legitimate businesses. https://en.wikipedia.org/wiki/The_Market_for_Lemons https://en.wikipedia.org/wiki/The_Market_for_Lemons > Akerlof's theory of the "Market for Lemons" paper applies to markets with information asymmetry, focusing on the used car market. Information asymmetry within the market relates to the seller having more information about the quality of the car as opposed to the buyer, creating adverse selection.[1] Adverse selection is a phenomenon where, buyers result in buying lower quality goods due to sellers not willing to sell high quality goods at the lower prices buyers are willing to pay. This can lead to a market collapse due to the lower equilibrium price and quantity of goods traded in the market than a market with perfect information.
  - ls612 3y ago
    Rooftop solar doesn’t seem like a good with unobservable quality that significant (which is necessary for the Akerlof equilibrium), this seems more like people not understanding what they are buying. For instance I 100% guarantee you the rate after the intro rate was disclosed in the initial contract and the people just didn’t look at it. You can’t fix stupid and all that.
crabmusket 3y ago
Compare America's federal rooftop solar subsidy scheme (the ITC) to Australia's (STCs): The ITC is a tax credit, which means only households with a large tax bill will be able to benefit. And they'll not benefit up-front, but only after their next tax year. STCs are cash rebates which actually reduce the up-front cost of purchasing solar. The ITC is based on the price of the system, which incentivises higher prices. STCs are based on the kW size of the system, according to a formula intended to estimate the system's energy production over its lifetime. It's a very rough approximation of course. (Not directly related, but the amount of STCs awarded also steps down annually until in 2031 no certificates will be awarded. This policy has remained remarkably stable over the last several governments.) The ITC looks to this foreigner like it was intended to ensure that solar must be purchased on finance. It's not "government subsidies" that are the problem, it's subsidies that may as well have been designed by banks. EDIT: Australia's market is by no means perfect, and we also have our share of financial shenanigans. But it's much better than what I've seen of the US market, and our prices are drastically lower.
- theptip 3y ago
  > The ITC is a tax credit, which means only households with a large tax bill will be able to benefit Can you explain your working here? Pretty much every home owning household is going to pay $10k of taxes, say.
  - crabmusket 3y ago
    That's a fair point, I hadn't run the numbers on that. It being a significant problem was just based on having read articles on the US market over the last 5-8 years and not an in-depth analysis, so I can't cite any of them in particular.
  - tsjackson 3y ago
    10k is a reasonable guess for how much tax liability is needed, and it's not a huge issue, but it is an issue. Retirees and lower-middle income folks often pay less than that each year, as do folks with even lower incomes who inherited their homes.
  - 3y ago
oatmeal1 3y ago
> There's a (superficial) good case for turning markets loose on the problem of financing the rollout of an entirely new kind of energy provision across a large and heterogeneous nation. > So the government moved in to tinker with the markets > But we won't get there with markets. All markets will do is create incentives to cheat. Typical example of someone blaming markets for outcomes caused by the government intervention in those markets, and the government's poor judicial system. > If governments are willing to spend billions incentivizing rooftop solar, they can simply spend billions installing rooftop solar The same thoughtful government responsible for creating a substantial portion of our global warming through car-dependent infrastructure can surely be trusted with the reins to mitigate it.
- pydry 3y ago
  >caused by the government intervention in those markets, and the government's poor judicial system. How exactly did the government intervene to make those fraudsters commit fraud?
  - sokoloff 3y ago
    When the government opens up the feed trough and fails to police it (as often happens), it ought not be surprised when pigs show up this time, just like the last 99 times…
    - pydry 3y ago
      Failing to police is not intervention it is a lack thereof. It's like blaming your alcoholism on your friends' intervention because they failed to stage an intervention.
      - h0l0cube 3y ago
        The government is charged with employing foresight when designing policy, particularly around financial incentives where the wolves are ready to take full advantage of any available loophole. The incentives need to be perfectly aligned with the desired outcomes, even for adversarial actors
trimethylpurine 3y ago
Great article, but any opinion about the solar industry that diverges from the marketing is a recipe for downvotes and harassment. Best to keep quiet and pretend solar, batteries, and other "clean" sources of energy are actually clean, while capitalists and marketers sweep the ugly truth under the rug by branding them with one political agenda or another. Most people aren't scientists and they have louder mouths and shorter tempers than do scientists.
- thelastgallon 3y ago
  > pretend solar, batteries, and other "clean" sources of energy are actually clean Death/TWH is a good metric. Do you have sources to claim solar and wind are not actually clean? https://ourworldindata.org/grapher/death-rates-from-energy-production-per-twh https://ourworldindata.org/grapher/death-rates-from-energy-p... https://ourworldindata.org/safest-sources-of-energy https://ourworldindata.org/safest-sources-of-energy
  - sunshinesnacks 3y ago
    That’s a good metric for safe. I think clean is best looked at in terms of something like lifecycle CO2 equivalent per kWh. In which case wind and solar are only beat by nuclear. Then there’s lifecycle (levelized) cost per MWh, where wind and solar are way ahead of nuclear, and mostly have an edge on gas CCs.
    - thelastgallon 3y ago
      > like lifecycle CO2 equivalent per kWh Oh yes, the big "scare" of it costs more (in terms of carbon) to manufacture. Does it cost zero carbon emissions for fossil fuels? Fossil fuels after all have to be explored, extracted (from 10s of thousands of feet from the bottom of the ocean) , shipped, shipped to refineries, shipped from refineries (40% of global shipping is fossil fuels), methane leaks from all this extraction of coal and oil, flaring. And all this comes free of carbon emissions? From the article you cited: Making solar cells requires a lot of energy. Fortunately, because these cells generate electricity, they pay back the original investment of energy; most do so after just two years of operation, and some companies report payback times as short as six months. Thats ten years back, Solar panels have been continuously advancing since then, quite possibly payback now is a couple of months or less. Perhaps read the source you cited instead of scaremongering?
scythe 3y ago
Part of the problem is that rooftop solar doesn't really make sense in the United States. It does make sense in Japan, possibly England, some parts of Europe, and maybe Miami and New Orleans. But in most of the country, solar farms are just a better value proposition. You've probably seen the numbers that if we just used the land currently growing corn for ethanol fuel, we could power the whole country. And we have a lot more empty land than that. The smart money also saw those figures, realized that there is no long-term market, and took their ball and went home. Installing stuff in cities — even suburbs — is expensive. Installation costs now dominate solar costs. Modus ponens, rooftop solar loses. The exceptions I mentioned are swampy places where open land is very expensive to build on.
thelastgallon 3y ago
If the Govts stop subsidizing fossil fuels directly and indirectly (ethanol subsidies, defense budgets to protect fossil fuel assets and shipping) then we'll have properly functioning energy markets. It will function perfectly if we price in the externalities: air pollution, climate change, energy security amnd terrorism. Why Are Governments Still Subsidizing Fossil Fuels? Last year, fuels that drive climate change and pollute the air were underpriced to the tune of $7 trillion. It’s hard to think of a more misguided policy: https://www.bloomberg.com/opinion/articles/2023-10-16/climate-change-why-are-governments-still-subsidizing-fossil-fuels https://www.bloomberg.com/opinion/articles/2023-10-16/climat... Air Pollution Kills 10 Million People a Year. Why Do We Accept That as Normal? https://www.nytimes.com/2022/07/08/opinion/environment/air-pollution-deaths-climate-change.html https://www.nytimes.com/2022/07/08/opinion/environment/air-p... more than 80 countries have policies that support biofuel demand: https://www.iea.org/energy-system/low-emission-fuels/biofuels https://www.iea.org/energy-system/low-emission-fuels/biofuel...
jacknews 3y ago
"only way we can approach them is though markets, those monkey's paw curses that always find a way to snatch profitable defeat from the jaws of useful victory." lol. markets certainly have their place, but they often need to be tightly controlled in order to devliver societal benefits, not just 'profits'.
incomingpain 3y ago
My solar investments sure havent done well. It doesn't seem to make sense neither. They ought to basically be amortized and pure profit.But they all seem to do so poorly. renewables are not so renewable as advertised.

95 points by Timothee 3y ago

This is a well written article, that makes the point that rooftop solar is good, but a market based approach to roll our it leads to anti-social outcomes like scammers installing substandard systems consumers pay through the nose for. Still, I would like to see some solutions articulated. Should we be promoting solar installation by non-profits? Direct government financed solar installation? Or abandoning rooftop and promoting community solar?

philipkglass 3y ago
Larger scale ground mounted solar looks like it will always beat rooftop solar in terms of energy produced per dollar of investment. There are some cases where rooftop solar can save money by eliminating the need for a grid connection altogether (remote rural properties) but that's a tiny market compared to current suburban-focused rooftop solar businesses. Ground mounted solar has the following benefits over rooftop solar: - Much less permitting overhead per megawatt of capacity installed - Safer and faster installation process (no risk of workers falling off rooftops, uniform rows of panels are easier to install) - Lower hardware costs for inverters (since the units are larger) - Easier to orient panel installation for optimum sunlight gathering, so a unit of capacity generates more electricity each year - Easier to clean panels regularly, so a unit of capacity generates more electricity each year - Possibility to use single axis sun tracking mounts for panels, so a unit of capacity generates more electricity each year Rooftop solar has the following benefits over ground mounted solar: - No additional consumption of land - Slight reduction in transmission and distribution costs, since more electricity is generated directly at the site of consumption These benefits are comparatively minuscule. A least-cost, fastest-progress plan for decarbonization would have the solar component heavily weighted toward large scale ground mounted projects. The additional money that would otherwise be spent on rooftop solar is better invested in all sorts of other things: wind farms, battery storage, insulation retrofits, heat pump replacements for gas heating...
- ldbooth 3y ago
  Generally agree, though let's be real that transmission and distribution losses for ground mount solar are not slight, they are in the 30-40% range, like all utility T&D.
  - philipkglass 3y ago
    That's much too high an estimate, at least for the United States: How much electricity is lost in electricity transmission and distribution in the United States? The U.S. Energy Information Administration (EIA) estimates that annual electricity transmission and distribution (T&D) losses averaged about 5% of the electricity transmitted and distributed in the United States in 2018 through 2022. https://www.eia.gov/tools/faqs/faq.php?id=105&t=3 https://www.eia.gov/tools/faqs/faq.php?id=105&t=3
  - kwhitefoot 3y ago
    That's just outright false. Where did you get it from.
    - ldbooth 3y ago
      I can't find a link so I'll explain it... Single high voltage transformers approach the 6-8% at full load... Not to mention the wire losses and other transformers in the system minimum 3-5). The number you quoted from the EIA is not accurate. See this Nameplate Z% (impedance aka losses) of an ABB 20MVA transformer: https://images.app.goo.gl/hXNTWAv1xnu83znQ7 https://images.app.goo.gl/hXNTWAv1xnu83znQ7 It is higher as the transformers get larger. Correction tho... 30-40% includes the losses from generation, not just T&D. And if you keep searching the EIA quoted that at 34%.
      - kwhitefoot 3y ago
        > The number you quoted from the EIA I didn't quote any numbers.
- lancewiggs 3y ago
jokethrowaway 3y ago
I don't see how you can say government subsidies are a "market based" approach Why not try to just NOT create incentives and let consumers choose?

sufimalang 3y ago

That’s just the nature of western capitalism.

rgmerk 3y ago
Australian capitalism isn’t that different to American capitalism, and the interaction of government incentives and market players has produced all manner of disasters here too (child and aged care are but two examples). But in the case of the solar market things have turned out dramatically differently. The Australian rooftop solar market has worked so well that a large part of the market is now unsubsidised.
rstuart4133 3y ago
> That’s just the nature of western capitalism. I'm also an Australian, and I think rgmerk is bang on. It's not the nature of all capitalism - just the USA style of it, and only in some instances. It seems to arise from the USA's love affair with free markets, or perhaps distrust of governments. They are two sides of the same coin, because distrust of government means they don't trust them to put the rules in place require to create competitive markets. For clarity, not all markets are equal. A monopoly is a kind of market for instance, but it's one that favours the suppliers. As other comments here have pointed out, some markets can self-destruct. A personal example is I refused to purchase SD Cards off suppliers like Ebay because fraud was so rampant, and it was impossible to figure which sellers were genuine. Later, SD Cards disappear from Ebay from a while - ie the market collapsed. I bought my SD Cards from stores instead, so that market (for an identical good) worked fine. A competitive market is one where there are lots of buyers, lots of sellers, free flow of information - in general no power imbalances. They are surprisingly fragile. Government intervention is often required to create them. An example of such in intervention is the EU changing the rules for software, effectively saying software must do what it promises on the side of the box. (Currently software typically has shrink wrap licences that disclaim all liability if it doesn't work.) In typical fashion, a lot of what appeared to be USA posters here decried the the unnecessary impost on business, and promptly predicted all software producers would move their operations to the USA. Perhaps they will, but businesses can't survive without customers and it's just as likely the customers will doing their purchasing in the EU when they can.

collaborative 3y ago

I got my roof mounted solar by saving for 3 years, getting multiple quotes, and going with what I thought was sensible. At current rates it will pay itself off in 9 years. It's not a great investment but also good for the environment. I wouldn't recommend borrowing for it. Just save for it if you can

Retric 3y ago
Good luck finding a 25 year bond with even close to that rate, risk profile, that also pays after tax returns.
toomuchtodo 3y ago
I have solar on all of my properties (primary, secondaries, rentals), but there is a lot of peril in the residential solar install market. Below are some of my observations on the topic from my experience. You can install on asphalt shingle roofing, but I don't recommend it; unless aligned with your roof replacement cycle, you're going to be paying thousands to remove and reinstall the system (racking and panels) to reroof when the time comes. Install solar on your roof if the roofing material will outlive the initial solar lifetime (~25-30 years). I love standing seam metal roofs for this, as there are friction mounting systems where you do not need to penetrate the roof to mount the racking and PV panels; $$$ but worth it imho. If your roof is coming up for replacement, do not install until replacement has occurred. Installers are fly by night (lots of sales->subcontractor to install relationships) and it is very likely they won't be around to maintain the system; the only mitigation for this is to find a vendor who is also a roofer or some other business that can buffer from the cyclic nature of residential solar (cyclic from PV panel commodity costs and government incentives). If you're capable, get certified by the inverter manufacturer to get installer access to your system (Enphase University [1] or the like). Get multiple quotes from installers [2] (a coop buying org is also a great option if available in your area [3] [4]), compare on equipment and price per watt. Research what your interconnect agreement with your utility looks like. 1:1 net metering is best, everything else less so. Net metering vs something else will govern system sizing and panel layout/direction. No batteries unless your grid is unreliable and you have the economic tolerance for it, or there are generous incentives from your state and utility. No PPAs or leases, they are economically inferior with the cost of systems having fallen so much and can make a property transfer transaction more difficult. As you mention, borrowing for this is economically inefficient unless you can get a long duration loan at something like ~3%. It is a great equivalent of an after tax bond return as Retric mentions, but you must do your homework [3]; it is not turn key unfortunately. [1] https://university.enphase.com/ https://university.enphase.com/ [2] https://www.energysage.com/ https://www.energysage.com/ [3] https://www.energy.gov/eere/solar/articles/purchasing-power-going-solar-through-cooperatives https://www.energy.gov/eere/solar/articles/purchasing-power-... [4] https://www.solarunitedneighbors.org/the-ultimate-solar-co-op-guide/co-op-guide-whats-a-solar-co-op/ https://www.solarunitedneighbors.org/the-ultimate-solar-co-o... [5] https://www.reddit.com/r/solar/wiki/homeownerguide#/c/purple https://www.reddit.com/r/solar/wiki/homeownerguide#/c/purple

a1371 3y ago

Highly opinionated article void of facts. Reaching the conclusion that the government should install solar, not seeing the fallacy in that argument. Governments are also optimization machines that connects the opinion of voters and interest groups, to action. What they spend on is not based on objective good, it's based on what the public opinion is that year. Most people would rather money going into low income housing and fighting homelessness. So the system will end up underfunded and that's assuming if the gov is efficient. I say that as a socialist, if the market is bad, regulate it.

civilized 3y ago
Well-covered ground in public choice theory https://en.m.wikipedia.org/wiki/Public_choice https://en.m.wikipedia.org/wiki/Public_choice
sp332 3y ago
I don't think the argument is that the government should install all solar. But if they're going to put all this money into it, they should put the money into just installing it instead of these gameable incentives.

jokethrowaway 3y ago

I love how the author blames the market and then goes on to explain the government created subsidies in the first place. If you let the market do his thing the growth would have matched exactly what consumers wanted. We also had some moderate subsidies in my EU country but we didn't get fast salesmen and crappy products. The quality was reasonable. I suspect this happened because the subsidies were not large enough to warrant the business model. We, the middle class taxpayers, just gave a bunch of free money to the people who own houses and who were smart enough to buy solar panels - which happened to be quite rich already.

deleted 3y ago
[deleted]

ChumpGPT 3y ago

I dreaming but man would I like a solar system that I could roll out like a 20 x 60 carpet in my backyard and connect it to a system to provide power or charge a battery pack. Otherwise fixed installation is to costly for me.

kwhitefoot 3y ago

Surely the fault is in the scammers not the market.

Karellen 3y ago
The point of "lemons" is that for some markets, scammers drive out legitimate businesses. https://en.wikipedia.org/wiki/The_Market_for_Lemons https://en.wikipedia.org/wiki/The_Market_for_Lemons > Akerlof's theory of the "Market for Lemons" paper applies to markets with information asymmetry, focusing on the used car market. Information asymmetry within the market relates to the seller having more information about the quality of the car as opposed to the buyer, creating adverse selection.[1] Adverse selection is a phenomenon where, buyers result in buying lower quality goods due to sellers not willing to sell high quality goods at the lower prices buyers are willing to pay. This can lead to a market collapse due to the lower equilibrium price and quantity of goods traded in the market than a market with perfect information.
- ls612 3y ago
  Rooftop solar doesn’t seem like a good with unobservable quality that significant (which is necessary for the Akerlof equilibrium), this seems more like people not understanding what they are buying. For instance I 100% guarantee you the rate after the intro rate was disclosed in the initial contract and the people just didn’t look at it. You can’t fix stupid and all that.

crabmusket 3y ago

Compare America's federal rooftop solar subsidy scheme (the ITC) to Australia's (STCs): The ITC is a tax credit, which means only households with a large tax bill will be able to benefit. And they'll not benefit up-front, but only after their next tax year. STCs are cash rebates which actually reduce the up-front cost of purchasing solar. The ITC is based on the price of the system, which incentivises higher prices. STCs are based on the kW size of the system, according to a formula intended to estimate the system's energy production over its lifetime. It's a very rough approximation of course. (Not directly related, but the amount of STCs awarded also steps down annually until in 2031 no certificates will be awarded. This policy has remained remarkably stable over the last several governments.) The ITC looks to this foreigner like it was intended to ensure that solar must be purchased on finance. It's not "government subsidies" that are the problem, it's subsidies that may as well have been designed by banks. EDIT: Australia's market is by no means perfect, and we also have our share of financial shenanigans. But it's much better than what I've seen of the US market, and our prices are drastically lower.

theptip 3y ago
> The ITC is a tax credit, which means only households with a large tax bill will be able to benefit Can you explain your working here? Pretty much every home owning household is going to pay $10k of taxes, say.
- crabmusket 3y ago
  That's a fair point, I hadn't run the numbers on that. It being a significant problem was just based on having read articles on the US market over the last 5-8 years and not an in-depth analysis, so I can't cite any of them in particular.
- tsjackson 3y ago
  10k is a reasonable guess for how much tax liability is needed, and it's not a huge issue, but it is an issue. Retirees and lower-middle income folks often pay less than that each year, as do folks with even lower incomes who inherited their homes.
- 3y ago

oatmeal1 3y ago

> There's a (superficial) good case for turning markets loose on the problem of financing the rollout of an entirely new kind of energy provision across a large and heterogeneous nation. > So the government moved in to tinker with the markets > But we won't get there with markets. All markets will do is create incentives to cheat. Typical example of someone blaming markets for outcomes caused by the government intervention in those markets, and the government's poor judicial system. > If governments are willing to spend billions incentivizing rooftop solar, they can simply spend billions installing rooftop solar The same thoughtful government responsible for creating a substantial portion of our global warming through car-dependent infrastructure can surely be trusted with the reins to mitigate it.

pydry 3y ago
>caused by the government intervention in those markets, and the government's poor judicial system. How exactly did the government intervene to make those fraudsters commit fraud?
- sokoloff 3y ago
  When the government opens up the feed trough and fails to police it (as often happens), it ought not be surprised when pigs show up this time, just like the last 99 times…
  - pydry 3y ago
    Failing to police is not intervention it is a lack thereof. It's like blaming your alcoholism on your friends' intervention because they failed to stage an intervention.
    - h0l0cube 3y ago
      The government is charged with employing foresight when designing policy, particularly around financial incentives where the wolves are ready to take full advantage of any available loophole. The incentives need to be perfectly aligned with the desired outcomes, even for adversarial actors

trimethylpurine 3y ago

Great article, but any opinion about the solar industry that diverges from the marketing is a recipe for downvotes and harassment. Best to keep quiet and pretend solar, batteries, and other "clean" sources of energy are actually clean, while capitalists and marketers sweep the ugly truth under the rug by branding them with one political agenda or another. Most people aren't scientists and they have louder mouths and shorter tempers than do scientists.

thelastgallon 3y ago
> pretend solar, batteries, and other "clean" sources of energy are actually clean Death/TWH is a good metric. Do you have sources to claim solar and wind are not actually clean? https://ourworldindata.org/grapher/death-rates-from-energy-production-per-twh https://ourworldindata.org/grapher/death-rates-from-energy-p... https://ourworldindata.org/safest-sources-of-energy https://ourworldindata.org/safest-sources-of-energy
- sunshinesnacks 3y ago
  That’s a good metric for safe. I think clean is best looked at in terms of something like lifecycle CO2 equivalent per kWh. In which case wind and solar are only beat by nuclear. Then there’s lifecycle (levelized) cost per MWh, where wind and solar are way ahead of nuclear, and mostly have an edge on gas CCs.
  - thelastgallon 3y ago
    > like lifecycle CO2 equivalent per kWh Oh yes, the big "scare" of it costs more (in terms of carbon) to manufacture. Does it cost zero carbon emissions for fossil fuels? Fossil fuels after all have to be explored, extracted (from 10s of thousands of feet from the bottom of the ocean) , shipped, shipped to refineries, shipped from refineries (40% of global shipping is fossil fuels), methane leaks from all this extraction of coal and oil, flaring. And all this comes free of carbon emissions? From the article you cited: Making solar cells requires a lot of energy. Fortunately, because these cells generate electricity, they pay back the original investment of energy; most do so after just two years of operation, and some companies report payback times as short as six months. Thats ten years back, Solar panels have been continuously advancing since then, quite possibly payback now is a couple of months or less. Perhaps read the source you cited instead of scaremongering?

scythe 3y ago

Part of the problem is that rooftop solar doesn't really make sense in the United States. It does make sense in Japan, possibly England, some parts of Europe, and maybe Miami and New Orleans. But in most of the country, solar farms are just a better value proposition. You've probably seen the numbers that if we just used the land currently growing corn for ethanol fuel, we could power the whole country. And we have a lot more empty land than that. The smart money also saw those figures, realized that there is no long-term market, and took their ball and went home. Installing stuff in cities — even suburbs — is expensive. Installation costs now dominate solar costs. Modus ponens, rooftop solar loses. The exceptions I mentioned are swampy places where open land is very expensive to build on.

thelastgallon 3y ago

If the Govts stop subsidizing fossil fuels directly and indirectly (ethanol subsidies, defense budgets to protect fossil fuel assets and shipping) then we'll have properly functioning energy markets. It will function perfectly if we price in the externalities: air pollution, climate change, energy security amnd terrorism. Why Are Governments Still Subsidizing Fossil Fuels? Last year, fuels that drive climate change and pollute the air were underpriced to the tune of $7 trillion. It’s hard to think of a more misguided policy: https://www.bloomberg.com/opinion/articles/2023-10-16/climate-change-why-are-governments-still-subsidizing-fossil-fuels https://www.bloomberg.com/opinion/articles/2023-10-16/climat... Air Pollution Kills 10 Million People a Year. Why Do We Accept That as Normal? https://www.nytimes.com/2022/07/08/opinion/environment/air-pollution-deaths-climate-change.html https://www.nytimes.com/2022/07/08/opinion/environment/air-p... more than 80 countries have policies that support biofuel demand: https://www.iea.org/energy-system/low-emission-fuels/biofuels https://www.iea.org/energy-system/low-emission-fuels/biofuel...

jacknews 3y ago

"only way we can approach them is though markets, those monkey's paw curses that always find a way to snatch profitable defeat from the jaws of useful victory." lol. markets certainly have their place, but they often need to be tightly controlled in order to devliver societal benefits, not just 'profits'.

incomingpain 3y ago

My solar investments sure havent done well. It doesn't seem to make sense neither. They ought to basically be amortized and pure profit.But they all seem to do so poorly. renewables are not so renewable as advertised.