The government is literally just US....it's our money and a collection of individuals from among us who we've appointed to handle the general administration of us and the space we take up.
Why should American entrepreneurs, particularly ones doing such an outstanding job of moving technology in a positive direction, not get our financial support (a.k.a. the government's support)?
Who exactly is losing out when we support our own business initiatives with our own money?
It's easy to look at Tesla and SpaceX and see a couple winning tickets in the "give money for technology" lottery, but they are not the only tickets our government has purchased. Consider all the other entrepreneurs who are doing an outstanding job of not so much moving technology in any direction at all but rather lining their pockets while cratering their industry's reputation, or those that make reasonable attempts with interesting but ultimately impractical innovations.
The people who object are generally objecting to the playing of the lottery itself. The most commonly proposed alternative is that these companies should earn the money by providing value in the market or convince investors (who have powerful financial incentives to get it right) that they can do so, rather than by convincing a relatively few laypeople with no real skin in the game to risk other people's money on them.
Pre-emptive disclaimer: yes, I know I've not mentioned any of the opposing arguments here. My purpose in writing this is solely to explain some of the key points (including some of the emotional appeals) in this particular side of this particular debate.
That way, these large foreign oil companies like BP (owned by Britan's public employee retirement funds) and Royal Dutch Shell can make a ton more dough while also raising prices by a few bucks in the domestic gas & natural gas market.
I think the primary problem of government funding is waste and the potential for corruption. Waste because the government is more immune to profit motive and thus can throw good money after bad for a long time. Corruption because you need to convince some bureaucrats v. all your customers (or whoever the market needs). The flip side is that, done well, you can get things done that no business could get done on its own.
So, if Tesla/cleantech succeeds, nobody will remember government funding as some sort of attenuation or 'asterisk' on the win: it was getting the industry over a hump, but into self-sustaining success. Win all around. The problem is if the government support ends up propping up business models that have no hope of actually being viable when that support goes away.
If cleantech ends up failing, then the government backing that which couldn't succeed in the free market will be remembered. But it's all a tradeoff: we're not going to be perfect every time and should be prepared to accept some misses if we think bootstrap government funding of promising but currently non-viable products is a worthy allocation of taxpayer money.
EDIT: sibling comment has great additional point about market distortion being a problem too.
Definitely contentious. A more correct formulation is "government is just the word for the things we are forced to do together"
Not saying its a rosy picture to live in an area with no publicly owned infrastructure, or any baseline public services like water, sewer, trash, education, courts, etc, but there are places in Latin America which have legal carveouts for a non-governmentally controlled area to exist, without taxes, laws or infrastructure.
Unless you are willing to live & fight for your beliefs, they are absolutely worthless, Martin Luther King & Cesar Chavez didn't accomplish anything sitting at home, they took to the streets and organized like minded people to stand with them and fight for the way things ought to be, regardless what businesses or government tried to do.
Example: one could characterize investment in cleantech as hedge fund-like speculation (other example: US monetary policy), albeit with the dividends paid to the American economy (and some larger proportion to Tesla etc shareholders). I think reasonable people can disagree over whether that is an appopriate action for a government to take (i.e. whether it is in their purview/mandate) separate from whether other issues are (utilities, defense, welfare, etc). A rejection of one is not a rejection of all, and similarly support for one is not support for all.
(Speaking generally: I don't know the specific views of perilunar or fennecfoxen)
It's also what a small left-leaning majority says to defend themselves and shut up their detractors while they inflict their will on the minority over an issue that's contentious (e.g. our recent health care reform).
And you'll notice that when legislation they don't like appears, you'll hear remarks to the effect of "that is not who we are!" (the standard obviously being relaxed when a government does something the speaker disagrees with).
> Dude, grow up
QED. Thanks, dude.
One valid argument against government aid is market distortion. One example of abuse is farming, where subsidies create a system(as far as I understand at least) where those that have enough land to tick of all subsidies have an edge over smaller farms (in addition to scaling), leading to consolidation and effectively paying land magnates with tax money.
A different aspect(more specific) is that maybe solar is just not ready and should fail, and only the subsidies make it viable, meaning people will have "junk" on their roofs without Solarcity to maintain it if the subsidies fade. However, that argument is only valid to me if coal/oil does not get subsidies currently, which I doubt
Even if it's something as straightforward as "green credits", the process can always be perverted to advantage one business over another.
Some good ideas need a bump through the 'chicken and egg' stage.
(the one that isn't is individuals voluntarily giving money to things where the benefit is shared by all)
Gas has 25% taxes where I live. Surely that's the opposite of 'subsidizing' it (vs, for example, electricity which is taxed at 5%).
What am I missing?
The tax is over 200% in most of the European Union, yet still doesn't fully cover the cost of roads and the external effects of pollution.
Some countries also subsidise it, such as by paying for prospecting or research.
- Strategic Petroleum Reserve - LIHEAP - exemption for farm vehicles on fuel
See more: http://www.forbes.com/sites/energysource/2012/04/25/the-surp...
Some people construe foreign military adventures such as Iraq 1991 and Iraq 2003 as oil subsidies. Without those, oil markets would be less stable, and consequently oil would be much less attractive as a fuel.
Except one ingredient is missing: most people cannot afford one, even if they tried really hard.
And then the economies of scale (and hopefully competition) will kick in and it should reach a point where nearly every new house, and nearly every replacement roof, will be solar by default. At least in climates friendly to solar.
IPhone got a lot of attention when it was released, but it was a while before they became common with more than just the early adopter crowd. This might take a while longer for various reasons, but still, this is a big deal.
This has an interesting twist. While it is subtle, people can tell you have it. People like to impress their neighbors. But this one isn't just "look how much money I have" but "look how I am using my money to be a responsible citizen of the planet." If you are going to try to enter the "keep up with the Jones's" race, this isn't a bad way to go about it.
I think this is key - often the pitch that "sure, it's expensive up front but will save you money in the long run" falls on deaf ears when people don't have the disposable income to immediately absorb that large up front cost, but when you're buying a house in most cases you're already taking out a large loan to finance a big up-front cost.
The advantage, of course, is the 0/low upfront costs.
Whether or not this model works for the roof tile system is another question entirely. Of course, the bill would be much larger, but the tax credit might be larger as well.
I'm not sure how they handle a circumstance in which your income causes your tax credit to be phased out. Likely there's fine print where you have to pony up extra money.
Relative to the benchmark of "People who can afford to buy a home in the US," perhaps a solar roof is not so unattainable. It just has to look great, convey social status, and be durable.
Most US home owners don't pay for their house (or car) outright. The putative purchase price of photovoltaic panels may not be prohibitive even for plebs.
And factoring in subsidies, electricity cost savings over a period 5-10 years, it might be more affordable than you think.
High end models few can afford at first, then slowly moving into the "regular guy" market once the R&D is done and mass production bottlenecks are solved.
$500 is not that much more expensive than a Nokia device at the time, and well within the surplus that a good chunk of people have to pay - especially when subsidized by carriers.
$30 000 - $100 000 - is another ballpark entirely in terms of cost. And it has to work out economically or it won't get anywhere, many ingredients are needed to make it work right.
Rumor mill has it that SC has been struggling, and the recent buyout from Tesla makes it look like Musk is transferring cash to himself.
Musk talks alot, and I'm still on the fence as to whether this is vaporware meant to distract from that.
It wasn't a rumor. Solar City was publicly traded and the struggles were documented.
http://www.forbes.com/sites/greatspeculations/2015/09/09/eve...
There are lots of upsides for future research and gained efficiency in the future though. Especially as electric moves toward big trucks down the road. (a semi full of solar panels could probably help propel the truck and save fuel etc.)
I'm a 'comments first' reader myself but TFAs are generally a must read for context and disambiguation before actually wading in.
However - I suggest this won't work out like the iPhone.
Why?
Because --> 'new roofs' are not built that often, by that I mean new homes and roofing replacements. And the construction industry has totally different dynamics.
Putting on a 'regular' new roof is expensive. Most people won't consider this tech unless their home is up for a new roof. The other market would be new homes.
So there's a growth/market limit.
Second is price. This kind of technology exists already in many forms. It hasn't been adopted because it's very expensive, and requires some other ugly equipment that has put a drag on PV installation like the conversion technology required to connect to the grid.
The choice to purchase an iPhone is mostly emotional.
The choice in roofing is not. It's definitely mostly a calculation. They are very expensive, and people will look into the long-term conversion value etc.
I'll wager that this new Tesla roof will not be price competitive for current solar/roofing situations, moreover, even if it were - it still might not make sense from a dollars perspective, as the current solar/roof installations basically don't work out economically. It's for wealthier types and/or those with 'green aspirations'.
Finally - these are not things you can buy from wallmart and install yourself. You can't even get your local roofer to do it. Typically, roofers have to be trained on the materials, installation etc.. There is the issue of warranty and distribution for 'new tech' in building - which is slow to adoption. Builders etc. are not 'magpies' like techies. They are averse to new gear, and typically wait for others to figure it out before buying in. Also - they simply tend not to be ver progressive.
Go and ask your local builder if he wants to send his crew to California for 'Training on Tesla's new roof' and his mental calculation will be 'how many of my current customers are asking for it'? And of course the answer will be none.
The fundamental issue with all of this solar tech is that it simply does not generate enough electricity to quite warrant the cost unless all the conditions are right.
+ If it's really sunny a lot + Major government subsidies + A new subdivision was created with 'all solar roofing' thereby keeping the costs down to economies of scale + High electricity prices in the region + The grid is fundamentally designed for renewables
etc. etc.
It takes a lot of the right ingredients.
One thing where I don't agree:roofs being an unemotional decision. Everything is influenced by emotions. All Solarcity has to do isb make it at least feasible for everyone price wise, then having the combination of the (apparently very fancy) French something style+the feeling you are a part of the solution for the planet+the tesla allure will do the rest for a suitable percentage of the market. That is iff the numbers work out enough to not make it an unreasonable choice.
The iphone would have failed at 1500 say. But 500 was barely cheap enough for what people got and felt they got to be worth it.
Source? Roofs last 20-30 years. 125 million homes in the U.S., with roofs being replaced every 25 years means 5 million roofs per year. Triple that for Europe, China, and the rest and you've got 15 million a year. It's a big ticket item so you don't have to capture that much of the market to start hitting pretty serious revenue numbers.
In Europe (or at least the parts I've been in) roofs last much more than that. At least twice as long. Esp in countries like mine (Spain) where climate is much less aggressive with rooftops. And we don't use tar shingles.
iPhone was a platform. As more people bought the iphone,
- the phone became more attractive to 3rd party accessory makers (protective cases, cables, etc) and apps makers.
- the phone itself became more valuable to owners, as more complementary products became available.
- the phone became more valuable to Apple, who could get feedback and make the phone better.
The hockey stick on the analogous factors for Tesla is much shallower. The "complementary products" for owners of cars will be primarily recharge stations. Still few and far between.
There is no benefit to 3rd parties, that I see. No benefit to other stakeholders like utilities. And Tesla itself does not enjoy a growing, self-reinforcing cycle of value, as sales increase. It's really just economies of scale.
Electric motorcycle or RV for the weekend or electric lawn mower. Just throwing it out there.
The tesla car itself could count as well, but felt less "design driven" imo. If this fails, everyone will call it obviously due to bad tech. If it succeeds, I'd say it was because the tech was barely sufficient to keep up with the excellent luster.
On a side note, I wonder whether or not the heavy government subsidies will be forgotten in the lore of clean tech, just like silicon valley seems to have forgotten the complete and utter reliance on government funding in it's infancy(or possibly even today)