How about by trying to make it illegal for state utilities to sell power generated by alternative energy?

https://www.popsci.com/wyoming-is-basically-trying-to-outlaw...

Many politicians place a very high value on the opinions of their major campaign contributors. Many of those contributions come from established coal based power companies.

In America a lot is being done to actively discourage anything but CNG and coal. Montana is literally crippling their economic growth to keep coal and CNG producers and burners happy and the US is raising tarrifs on solar panels and components to further damage a market that has already been under constant, pointless regulatory assault.

Strangely enough, installation in the US is a lot more expensive than it is in Germany and most other countries with a significant installed base of solar, even once you ignore subsidies. And according to something I read from the US Dept of Energy, one of the big reasons for that is reckoned to be over-regulation. That's because each US state has complicated, separate laws for permitting, attachment to the grid, and so on, whereas Germany has a unified regulatory system which allows installers to get decent economies of scale.

The US has all sorts of odd subsidies and issues of regulatory capture like this, I'm thinking also the corn subsidies, and the block on buying cars direct from retailers. It's ironic that all of that happens despite all of the vastly stronger rhetoric about cutting regulations. In my opinion it's another indication that a 'starve the beast' approach to government is not effective even on its own terms. To actually get rid of specific bad policy you have to campaign against those measures specifically, and have people in government who are acting in your interests, you can't just rely on a general anti-government government.

Good point about regulation. I am from Norway but have lived in the US. My impression is that regulation and bureachracy tends to be overly complicated in the US, while usually much simpler in Norway.

This happens despite Norwegians generally being positive to government and regulations while Americans seem knee-jerk anti anything government.

To get simple and good regulation I think you need an effective government and a belief in government. In Norway you can enact large and broad reforms and regulations, while in the US everything seems peacemeal.

Take welfare or healthcare. The US has a huge patchwork of small programs and minor regulations. This is due in part because of a reluctance towards broad but simple government programs like single payer.

A government can set standards for data exchange and bills e.g. which is why prescription can be sent from my doctor electronically to all pharmacies in Norway.

To be fair, Norwegians might be more anti anything government if the Norwegian regulatory system was as Byzantine as in the US.

>And according to something I read from the US Dept of Energy, one of the big reasons for that is reckoned to be over-regulation.

Yes. This is non-negligible part of the problem. There's lots of regulation and that plays right into the hand of the incumbents (utility companies) who can use that regulation to make it harder to compete.

And many of these subsidies are actually protective of existing energy industry that wants to enforce connectivity to the grid.

California in particular had a relatively quick plummet in power demand that actually caused older parts of the grid to start breaking. PG&E despite having used negligence to set a bombs with gas line negligence and kill dozens of dogs with electrified ground plates argued they couldn't cut into profitability, and started forcing people to reconnect to the grid even if the customer would exceed the maximum buyback cap PG&E offers (as I understand it, not a homeowner so this specific part is only my reading).

Result is protectionist nonsense that greatly reduces the profit margin of solar for individual installs.

Utilities certainly will build a coal plant when coal subsidies are over 3% of global GDP. That's a huge figure, and hardly capitalist.

https://www.sciencedirect.com/science/article/pii/S0305750X1...

You can see a copy of the report here: https://www.imf.org/external/pubs/ft/wp/2015/wp15105.pdf

It isn't a direct subsidy. They're saying pollution from coal has external costs and there isn't a tax on the coal-burning polluters to pay for this, so in effect coal has a subsidy.

I guess it has a point but I think calling that subsidy is misleading.

Subsidy just implies that someone other than the coal industry is paying for a cost that the industry imposes.

The only time the term subsidy didn't make sense was when we didn't know that these externalities existed. But the moment the costs were clear, not assessing them on the coal industry became a subsidy.

Subsidy suggests someone giving you money, as opposed to not taking your money. These are not the same thing at the margins.

It's a subclass of subsidy known as an "implicit subsidy":

https://en.wikipedia.org/wiki/Subsidy#Environmental_external...

There are assumptions in calling that a subsidy, I identified these two that I have issues with:

1) The net externalities are measurably negative

2) The coal producers should be paying them

There are clear and massive positive externalities to fossil fuel, and anyone arguing otherwise needs to take a deep breath. They are the foundation of modern civilisation, and we all get non-economic benefits from the era of unprecedented peace and prosperity that we live in. If we price in all the externalities, fossil fuels probably do deserve a subsidy. The renewables debate is about whether we have an alternative that is better than the historically magical substances we call fossil fuels.

Since it has a higher EROEI than solar, if we are going to start pricing in externalities I would be comfortable arguing fossil fuels deserves a higher subsidy than solar for positive externalities. I don't think that is sensible, but neither do I accept that there is an 'implicit subsidy'.

The 2nd assumption is a political question that afaik has been answered in the negative. It doesn't make sense to claim that they 'have a subsidy' when the system we use to determine if they should be paying for an externality (currently) accepts that they do not have to.

> They are the foundation of modern civilisation

This sounds like sentimentality. We've found better ways that costs less and have fewer externalized costs. Consistent electricity at the point of use is indifferentiable as to its source. It matters little if coal got us to this point if other technologies can provide cheaper energy in less environmentally harmful ways going forward.

> and we all get non-economic benefits from the era of unprecedented peace and prosperity that we live in

Prosperity is not at risk with the implementation of renewables and storage. The removal of the health costs of coal-generated air pollution will increase quality of life.

> unprecedented peace

What exactly does coal uniquely offer in terms of supporting peace vs other sources? Also, you are conflating coal with all other fossil fuels when it suits your argument. They are not all the same. Natural gas will continue to have use as a heating fuel for a long time, but the same can't be said of coal. It doesn't have a significant use today beyond producing electricity.

What is at risk are jobs in the already long-declining coal extraction, transport, and combustion industries, and the people in the regions that are dependent on those industries should be helped transition in the near term.

> There are clear and massive positive externalities to fossil fuel, and anyone arguing otherwise needs to take a deep breath. They are the foundation of modern civilisation, and we all get non-economic benefits from the era of unprecedented peace and prosperity that we live in. If we price in all the externalities, fossil fuels probably do deserve a subsidy. The renewables debate is about whether we have an alternative that is better than the historically magical substances we call fossil fuels.

I think you'd have to be pulling a pretty long bow to argue that fossil fuel extraction and use has no environmental externalities - this paper for example (http://insight.jbs.cam.ac.uk/2015/measuring-fossil-fuel-hidd...) shows that for 2008-2012 "the implicit subsidy exceeded post-tax profits (averaged over five years) at all 20 of the largest oil, gas and coal producing companies studied".

We're already (globally) subsidising the fossil fuel industry, I think it's only fair to ask for some of that money back - it's not like they would 'unpollute' the sky and sea if they could anyway.

While they may be the foundation of the modern era, fossil fuels are also a dirty relic that should be left in the past. Leaving aside the environment impact I don't think I'd have to argue so hard that they have a not-so-great legacy when it comes to huge injections of capital into the middle east and it's concomitant propping up of dictators and despotic dynasties.

The ability to derive useful energy from coal is not an externality, it is priced into the sale and consumption of the good.

Just for your benefit, an externality is a cost or benefit that is incurred by a party not involved in a transaction.

Cheap energy generates positive externalities. Obviously I'm not talking about the buyer and the seller of the that energy, I'm talking about the social polity at large. There are positives to having large cheap energy reserves, and those positives are absolutely not priced in to the energy market.

Cheap energy is an enabler that frees resources up for other tasks. It is not a reasonable position for someone to pretend that coal is 'implicitly subsidied' because they've picked up on one negative externality and decided that it should be priced in; the net picture needs to be considered. If we were going to price in all the externalities of having such a cheap and convenient but dirty fuel it might well get an actual subsidy, but that would be silly in its own right. This is one of the major reasons why the pro-renewables crowd has such difficulty convincing anyone to price in the environmental impacts.

Sure, if the debate is had and we all decide that a specific negative externality is to be priced in then I've got no leg to stand on and I'll sing a different tune. But governments so far have implicitly accepted that that negative externality should not be priced in.

Agreed. Its interesting too the external costs of not using coal. EG shutting down mines causes a lot of economic hardship in some regions of the US. Is that a subsidy for gas/solar/nuclear?

No. You also do not have standing to sue a company for decreasing the resale value of your property by releasing a new model.

There absolutely can be social utility in remedying structural unemployment, but we are not in an economic system where people have a right to wages for work that is not valuable.

It is a subsidy under our legal system if the industry / plant / miner causes a tort and it's not remedied. That's money going out of one persons pockets into another.

Sure, the term might not be the most appropriate one, but if we are talking about choosing the most effective use of capital to create energy, and one method has negative externalities that are shared by the whole world but are not taxed, and one method does not, then it's much harder for solar to be an attractive option. The market is skewed.

With a very broad definition of subsidy. By this definition roads are subsidy for cars (turns out, Greenpeace agrees with this one! https://www.thebalance.com/government-subsidies-definition-f...)

"Undercharging for global warming accounts for 22% of the subsidy in 2013, air pollution 46%, broader vehicle externalities 13%, supply costs 11%, and general consumer taxes 8%."

Call the negative externality costs whatever you like, but the coal industry doesn't pay it, which makes it seem cheap compared to solar. Which is why this article is news.

how can you possibly say roads are not subsidized for cars? if i wanted to build a railway, and the government built the track for me wouldn't that be a subsidy?

just because the government normally pays for it, doesn't make it somehow not a subsidy.

Ha! Can't tell if trolling or what, but if you want a great example from California look at Panoche Valley. It's a barren wasteland with no crops and little grazing, where the Spanish explorers despaired that they'd entered Hell. But as soon as someone wanted to put a solar power station there, chaos broke out. Even the Sierra Club sued to stop the project. Project eventually got downsized from 250MW to 150MW, and construction has only just started, 10 years into the project.

https://en.wikipedia.org/wiki/Panoche_Valley_Solar_Farm

Many states have put up barriers to rooftop solar, at the behest of local utilities. That's the most common and obvious example.

If politics can help it through subsidies, then it can certainly harm it through opposite means (subsidies of competitors, fees, taxes, tariffs, overregulation like zoning rules, extra requirements or legal liability, etc.).

decreasing prices also reduce an investor's return

if prices keep dropping hugely year after year: investors aren't going to be very willing to risk their capital, as tomorrow's prices might not allow them to recoup their investment

(yeah, futures are the answer, but are presumably expensive if you're talking about decades)

Depends on the rate of return and payback.

Panels only last ~20 years so they need to payback ~5% of the investment + interest in the first year. Assuming costs drop less than ~4% waiting is unlikely to be a net benefit. (Basically, trading 1 year now for 1 year 20 years from now is rarely worth it.)

Further, panels are far from the only cost involved so really waiting is generally not worth it. Which you can see because panels are being used as quickly as they can be manufactured.

Is that true that panels only last for about a couple of decades? A quick google suggests that that's just the warranty period and they just lose about 1% efficiency a year.

This stuff depends on the panel. Panels may still function in 40+ years, but the decreasing power output becomes very significant.

I am more saying losing total output in ~30+ years and ~0.5% to ~1% power output until then is about the same as losing 1 year of power output 20 years from now.

>How does politics prevent electricity companies from building solar plants.

By whacking massive tariffs on imported solar panels.

They pretend it's done for the benefit of American solar manufacturers. It's not. It's done for the benefit of coal and gas. If they just wanted to help American solar manufacturers they'd give them subsidies to offset what they (erroneously) considered "unfair" competition from China.

Let's not forget major wind power states literally making it illegal to compete with gas.

A subsidy is a government cost and likely needs more approvals than A tariff which is a source of income for the government. One was accomplished with executive order while the other would likely have to go through congress.

They did it before with solyndra.

That was before solar became an existential threat to coal and gas.

Obama had some fairly close ties with oil/gas despite him trying to tout his green credentials.

Those tariffs are brand new and in the US, but the data in TFA is fro last year in Australia.

A) Solar tariffs were initially brought in under Obama and B) I figured the question was a general one - not specific to Australia.

The reason for the tariffs is definitely related to why the costs are so low.

1) Chinese manufacturers stole American technology and are producing without having paid the R&D.

2) China is heavily subsidizing the industry on many levels all the way down to raw materials. If China were a company in the US we'd be calling them out for violating our monopoly laws, driving everyone else out of business.

I don't support tariffs on anything under any circumstances, but I think it's important not to let the discussion get framed as a simple: Obama/Trump hate solar because donors. There's a bigger geopolitical game being played here.

I skimmed the state department report justifying the tariffs and one of the justifications they gave was "local governments in China promoted local solar companies on their websites. This amounts to free advertising, which is a subsidy".

The phrase "clutching at straws" jumped instantly to mind. I think they weren't expecting anybody except the Chinese to actually read it. There were zero reports in the US media on its contents. They basically just reported that the report existed.

I have seen precisely zero evidence for 1. Frankly, Chinese solar tech beats US tech hands down. The US might be better at making ridiculously expensive panels with 2% extra efficiency to go on satellites but Chinese companies aren't even competing in that market - their tech is centered around making panels that are acceptably efficient with aggressive cost cutting in their manufacturing process. They're hands down the best in the world at that.

China does get an implicit subsidy via the suppressed yuan but that applies equally to all Chinese products, not specifically solar panels, so if you're going to slap 30% tariffs on solar panels why not assembled iphones too?

The geopolitical game being played here involves one of misdirection. If you follow the trail of money it becomes clear what is really going on. The US solar manufacturing industry is small and makes almost no political donations. The US solar installation industry - who lobby against tariffs - is much larger and contributes much more. Both are completely dwarfed by political contributions from coal, oil and gas.

The idea that Obama and Trump (the latter especially not being known as being a friend of clean energy) are simply trying to help a weak and politically irrelevant industry out of their green, green hearts and only coincidentally helping their "real" friends I frankly consider an insult to my intelligence, but hey, people lap this shit up.

Don't they?

In 2009-ish China announced subsidies of basically half the cost of any large scale solar installations. The Chinese government has been giving solar companies below market rate loans. According to Scientific American China chipped in $47 Billion to build its solar industry.

This is, of course, in addition to the standard protectionist industry subsidies like the Joint Venture rules, subsidies on raw materials like steel, or transportation of such goods via rail, etc.

[1]: https://www.scientificamerican.com/article/why-china-is-domi...

The tariffs under Obama were much more specific as to country of origin, and Chinese manufacturers quickly dodged them by moving. The current tariffs are in essence new in that they apply much more broadly and are not specific to China.

I think perhaps you should have avoided using the phrase "brand new" to refer to tariffs that are not new and have simply been tweaked. Right?

I think it's also cute how you think Trump of all people is so concerned helping out US solar manufacturers given his, y'know, words.