Solar happenings

[Robert.Boston]

I'm not likely to make friends with this post, but there are largely three reasons why solar is a US success story:

1. Consumers who want to take charge of their own renewable energy generation, and receive a substantial discount because of tax policies;
2. Massive subsidies through Solar REC programs etc.
3. Massive subsidies through net metering provisions.

If solar had to compete head-to-head with other energy sources -- even other renewable energy sources -- on an energy-only basis, it is economic only in specialized applications. Some people don't care if it's economic, and my hats off to them, but it's unclear why state and federal governments should be paying for a large portion of these private installations.

Just to be clear, I'm strongly in favor of a shift to renewable power. I'm just not in favor of policies that favor one particular industry (solar) over others that may be even more cost-effective.

 

[Citizen-T]

I'm not likely to make friends with this post, but there are largely three reasons why solar is a US success story:

1. Consumers who want to take charge of their own renewable energy generation, and receive a substantial discount because of tax policies;
2. Massive subsidies through Solar REC programs etc.
3. Massive subsidies through net metering provisions.

If solar had to compete head-to-head with other energy sources -- even other renewable energy sources -- on an energy-only basis, it is economic only in specialized applications. Some people don't care if it's economic, and my hats off to them, but it's unclear why state and federal governments should be paying for a large portion of these private installations.

Just to be clear, I'm strongly in favor of a shift to renewable power. I'm just not in favor of policies that favor one particular industry (solar) over others that may be even more cost-effective.

I agree with your analysis, but not your conclusion. I think the government has an interest in reducing pollution and our dependency on foreign oil. The market doesn't care about these things, it only cares about money. So, if it is the policy of the United States to get off of dirty/foreign sources of energy, then it is completely appropriate for the government to interfere in these markets.

That said, I agree with you that I think the government should stay out of the business of choosing the solution to these problems. The market is much better (and more efficient) at picking winners. Instead, I believe what they should do is handicap the current winners in such a way that the market is encouraged to choose a new winner. As an example: they could apply taxes to artificially inflate the cost of other dirty/foreign energy which would encourage the market to find a better solution.

I think the reason that this doesn't happen is because there is such a stigma around new taxes. Especially ones that everyone has to pay (not just the rich). In truth though, we are all paying for these subsidies, just in a more round-about way.

 

[JRP3]

Just to be clear, I'm strongly in favor of a shift to renewable power. I'm just not in favor of policies that favor one particular industry (solar) over others that may be even more cost-effective.

Could you be specific about which technologies at what price points are more cost effective?

 

[ElSupreme]

Could you be specific about which technologies at what price points are more cost effective?

I imagine that wind and hydro are cheaper than solar in most locations.

I would think geothermal power would be very cheap, but only in very limited areas. I would also think tidal could be cheap to implement, but might be costly to maintain (remote locations and corrosion problems).

Solar is just so easy, and has the added benefit of producing power when it is in most demand.

 

[Dave EV]

I think the reason that this doesn't happen is because there is such a stigma around new taxes. Especially ones that everyone has to pay (not just the rich). In truth though, we are all paying for these subsidies, just in a more round-about way.

It's not just the fact that the one of the more effective ways for the govt to "interfere" is to tax behaviors that it wishes to discourage, but the biggest issue is getting people to agree on how much of a tax is needed to discourage certain behaviors.

Obviously burning coal and gasoline is bad and the cost of burning coal and gasoline is heavily subsidized because for the most part, the externalities of burning those fuels have next to no cost.

There is a very large effort to keep the costs of those externalities from going up, to the detriment of the environment, public health and future economic stability.

So my canned response to the claim that "the govt should stop picking winners & losers - let the free market decide!" is "I agree - as soon as we come up with an effective method of pricing externalities into our products".

BTW - here's a good example of the difficulty of pricing externalities - obviously the environmental effects of burning a gallon of gas in a modern PZEV vehicle is much less than say burning a gallon of gas in a weed whacker. So to be fair, you really should pay a lot more to burn that gallon of gas in the weed whacker than than the PZEV vehicle. But how you create a "free market" that accounts for that?

 

[JRP3]

ElSupreme,
I doubt hydro is viable other than where it's already installed for a number of reasons, and wind probably only in specific locations.

 

[ItsNotAboutTheMoney]

I imagine that wind and hydro are cheaper than solar in most locations.

I would think geothermal power would be very cheap, but only in very limited areas. I would also think tidal could be cheap to implement, but might be costly to maintain (remote locations and corrosion problems).

Solar is just so easy, and has the added benefit of producing power when it is in most demand.

It's not a direct effect, but Germany has apparently seen a benefit in lowering of wholesale prices due to the large amount of solar capacity.

 

[Robert.Boston]

Could you be specific about which technologies at what price points are more cost effective?

Your question is my answer...good policy doesn't need to answer this question. Good policy says, "We would like more (or less) of XXX. Markets, please solve this problem for us."

I'm quitting my current consulting gig to be the EVP of an ocean wave energy company. Although we've yet to prove this technology with full-scale devices in the water, I've got sound reason to believe that our tech will compete directly with fossil-fueled generation, without the need for subsidies. Am I right? Time will tell. Check back next year this time. But it's annoying that on-site solar is getting financial benefits that my tech won't, just because someone in Sacramento has decided that rooftop solar is "good". A technology-neutral policy, like a carbon tax, is far more effective at achieving results.

 

[JRP3]

Your question is my answer...good policy doesn't need to answer this question. Good policy says, "We would like more (or less) of XXX. Markets, please solve this problem for us."

Doesn't the market solve it with coal or NG though? The market is short sighted and looking to optimize profits while lowering costs.

I'm quitting my current consulting gig to be the EVP of an ocean wave energy company. Although we've yet to prove this technology with full-scale devices in the water, I've got sound reason to believe that our tech will compete directly with fossil-fueled generation, without the need for subsidies. Am I right? Time will tell. Check back next year this time. But it's annoying that on-site solar is getting financial benefits that my tech won't, just because someone in Sacramento has decided that rooftop solar is "good". A technology-neutral policy, like a carbon tax, is far more effective at achieving results.

My question is what are the long term maintenance costs of something like wave energy, or wind power, and how do you calculate them in advance? Wave energy is subject to a very harsh environment. This is where solar may have an advantage.

 

[woof]

I'm quitting my current consulting gig to be the EVP of an ocean wave energy company. Although we've yet to prove this technology with full-scale devices in the water, I've got sound reason to believe that our tech will compete directly with fossil-fueled generation, without the need for subsidies. Am I right? Time will tell. Check back next year this time. But it's annoying that on-site solar is getting financial benefits that my tech won't, just because someone in Sacramento has decided that rooftop solar is "good". A technology-neutral policy, like a carbon tax, is far more effective at achieving results.

For commercial scale power projects, I agree that tech-neutral policies make the most sense. However, it seems to be much easier to pass "xyz tech is good, lets give it a break" legislation vs "zyx is bad, let's make it hard" legislation. Somewhere someone has to say "solar good" on a blanket basis to grease the wheels of progress. But "solar good", doesn't preclude "wind good" (as you know from Cape Wind), and someday perhaps "wave good". It takes time, money, and lobbyists but you know all that.

Congrats on the new gig. If I'm guessing right, you're moving north to the financial district. Hope you find charging there.

--Woof!

 

[Norbert]

A technology-neutral policy, like a carbon tax, is far more effective at achieving results.

I'm totally in favor of a carbon tax, however would not expect it to provide the best solution in all cases.

Some technologies, and solar seems to be one of them, require a lot of research and continuously improving production until they become competitive with other technologies (also renewable or not). The cost of solar has been continuously going down over many years, achieving significant improvements, proportional to the volume of installation. In such cases, I do think it is the government 's role to identify technologies with a promise of future importance, and support them. In addition to a carbon tax, that is. The government won't be prefect in making those decisions, but that doesn't mean they aren't a good thing. Even more so as a carbon tax currently doesn't seem to be a near-term possibility, politically.

 

[brianman]

I agree with some of Robert's point, but not some of the follow-up points of him and others.

The assertion as I understood it was that government involvement is part of the problem. The solutions offered were more government involvement (new taxes).

I posit that if the problem is government involvement, then the solution is to remove (at least) some of it. Lower (or remove) existing subsidies to level the playing field, don't inject new taxes.

Just another opinion, I'm aware.

 

[Norbert]

The problem is carbon dioxide, smog and resource consumption.

 

[JRP3]

Not to mention population growth....

 

[Citizen-T]

I agree with some of Robert's point, but not some of the follow-up points of him and others.

The assertion as I understood it was that government involvement is part of the problem. The solutions offered were more government involvement (new taxes).

I posit that if the problem is government involvement, then the solution is to remove (at least) some of it. Lower (or remove) existing subsidies to level the playing field, don't inject new taxes.

Just another opinion, I'm aware.

Fair enough. We could start by removing all the subsidies we give to the oil and gas industry. I don't think that will be enough though. For instance, we can't unwind all the money we spend using our military to stabilize the price of oil.

I think a tax would be necessary if we wanted to see progress in the near term.

Sent from my Nexus 7 using Tapatalk HD

 

[brianman]

For instance, we can't unwind all the money we spend using our military to stabilize the price of oil.

You're making the assumptions (1) that the military's role is only for oil and (2) that we want to completely unwind military spending.

I don't agree with either.

 

[cinergi]

I'm not likely to make friends with this post, but there are largely three reasons why solar is a US success story:
(snip)

On the contrary, I find it educational. I find it refreshing, informative, and thought-provoking. So thank you!

 

[Robert.Boston]

Doesn't the market solve it with coal or NG though? The market is short sighted and looking to optimize profits while lowering costs.

That depends on what question is asked. Currently, mostly we just ask for reliable, plentiful, and cheap power; emissions profiles matter some, which is why NG is winning over coal. If policy drove us towards low carbon-emitting technologies, and that policy direction was a committed, long-term view, then we'd see innovators and investors working to find sustainable energy solutions. But there has to be some "pot of gold" for achievement. That could be through a carbon tax, with proceeds redistributed to consumers to be net-zero cost, but changing the marginal prices enough to change purchasing decisions. Or it could be through a cap-and-trade CO2 program with a glide-path down to sustainable levels. But until we provide a positive economic upside to investing in creating and building sustainable energy solutions, we're not going to tap the full potential of human ingenuity and capital markets.

My question is what are the long term maintenance costs of something like wave energy, or wind power, and how do you calculate them in advance? Wave energy is subject to a very harsh environment. This is where solar may have an advantage.

Good questions. Off-shore wind farms are enormously expensive to maintain; an estimate by experts from the Brattle Group hired by the Attorney General of Massachusetts indicates that the operations and maintenance costs of Cape Wind would likely exceed the total variable cost of a natural-gas-fired combined cycle plant. That's expensive, considering that the capital cost of an off-shore wind farm is much higher (per kW-installed) than that gas-fired plant.

I'll just say that I wouldn't have signed on with my wave energy company if I didn't think we had this important problem well in hand.

 

[Citizen-T]

You're making the assumptions (1) that the military's role is only for oil and (2) that we want to completely unwind military spending.

I don't agree with either.

What? I made neither assumption and frankly, I don't understand how you could have possibly thought I did. My assumptions are just that some portion of military spending is used to stabilize the price of oil. I think that is obvious, but if not I'd be happy to give examples. My point was just that this counts as a subsidy too, and it would be a difficult one to unwind if we wanted to eliminate all subsidies. As such, we might want to just offset it with a tax.

If a non-military example would be more palatable to you, consider how much we spent/spend on the strategic petroleum reserve. That's another subsidy really, and another one that we can't just drop to level the playing field. We'd need to offset it in some other way.

Sent from my XT912 using Tapatalk 2

 

[brianman]

What? I made neither assumption and frankly, I don't understand how you could have possibly thought I did.

Please reread the portion that I quoted in that reply. Perhaps I misunderstand what you intended, but I thought my reading was pretty literal (too literal?).