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olofscience

Solar is now "the cheapest electricity in history", confirms the IEA

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summary: https://www.carbonbrief.org/solar-is-now-cheapest-electricity-in-history-confirms-iea

actual report: https://webstore.iea.org/world-energy-outlook-2020

A quote from the 434-page report:

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For projects with low-cost financing that tap high-quality resources, solar PV is now the cheapest source of electricity in history.

The table shows that solar electricity is some 20-50% cheaper today than the IEA had estimated in last year’s outlook, with the range depending on the region. There are similarly large reductions in the estimated costs of onshore and offshore wind.

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Overall, renewables – led by the “new king” solar – meet the vast majority of new electricity demand in the STEPS, accounting for 80% of the increase by 2030.

This means they overtake coal as the world’s largest source of power by 2025, outpacing the “accelerated case” set out by the agency just a year ago.

 

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Anyone that wants to install solar just do it. But if you also connect to the grid then you must pay a share of that cost. The generation source, transmission and distribution infrastructure is not cheap. If grid connected you are also responsible for installing the safety systems necessary to protect the lineman.

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31 minutes ago, billeisele said:

Anyone that wants to install solar just do it. But if you also connect to the grid then you must pay a share of that cost. The generation source, transmission and distribution infrastructure is not cheap. If grid connected you are also responsible for installing the safety systems necessary to protect the lineman.

Absolutely, especially to that second one. I've heard some schemes that have utilities charging what they estimate entities (both individuals and small businesses/churches) would have used, as a "line use fee." Which, of course, makes the installation of solar moot.

Wendy P.

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7 hours ago, billeisele said:

Anyone that wants to install solar just do it. But if you also connect to the grid then you must pay a share of that cost. The generation source, transmission and distribution infrastructure is not cheap. If grid connected you are also responsible for installing the safety systems necessary to protect the lineman.

Agreed to all of that.  And that's what is happening now; the interconnect agreement costs $$ and you end up losing most of the money you make by exporting excess power to the grid.  That money ends up in the utility's pocket.

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7 hours ago, wmw999 said:

Absolutely, especially to that second one. I've heard some schemes that have utilities charging what they estimate entities (both individuals and small businesses/churches) would have used, as a "line use fee." Which, of course, makes the installation of solar moot.

Wendy P.

Not sure about the costs in your area. In SC the residential rate is approximately 12 cents. Of that, about 2.8 cents is the cost of the electricity. The remaining 9.2 cents is the infrastructure, labor, metering costs, profit, etc. The authorized rate of return is about 10.5%. Since the last rate change the actual return is closer to 8%.

The problem with the current renewable rules in SC is the regulated utilities are required to credit the homeowner for any unused energy at the full retail rate of 12 cents. That is crazy when the only cost being avoided is 2.8 cents. Effectively what is happening is 99% of the customers are subsidizing the 1% that installed solar. Customers are charged a Distributed Energy Resource fee on their monthly bill and they are not liking it.

The utilities are currently trying to change that. It's interesting to read and hear the testimony of the solar companies. "This will kill the solar industry, it's not fair, etc." Well duh, if the technology isn't cost effective without the 9.2 cents subsidy then maybe it shouldn't be used.

Some have proposed a solar rate that includes an "infrastructure fee" as part of the base charges. The intent is to remove any subsidy.

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3 hours ago, billeisele said:

The problem with the current renewable rules in SC is the regulated utilities are required to credit the homeowner for any unused energy at the full retail rate of 12 cents.

Only until they get to zero.  Then they get either 2.8 cents or (more commonly) zero cents.

This makes sense. They still pay a minimum charge that goes towards infrastructure.  But since the utility no longer needs to expand distribution or generation due to increased solar generation, the utility saves money overall.

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Effectively what is happening is 99% of the customers are subsidizing the 1% that installed solar.

Nope.  That's a common myth that some people use to attack residential solar.  "Why should I have to pay for my neighbor's solar?  I am paying his bill and he's paying nothing!"

Turns out not only is that not true, the opposite is true - residential solar saves money for the neighborhood.

"Scientists say solar panels lower peak demand on stressed traditional grids and have reduced the amount of infrastructure dollars that energy utilities must invest. . . . .Utilities have worried that solar panels increase the cost for surrounding homes, maybe based on the idea that these neighbors could be charged higher rates to compensate for “missing” electricity customers.  Instead, Pearce and Soulemane found that homes with solar panels are heavily subsidizing their local electrical grids—to the point that their research calls for regulatory reform."

https://www.popularmechanics.com/science/energy/a35474729/solar-panels-bring-down-energy-costs-for-everyone/

https://www.sciencedirect.com/science/article/abs/pii/S1364032120308832?via%3Dihub

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The utilities are currently trying to change that.

Of course they are.  They are public utilities.  The only way they can make significantly more money is if a law is passed that sends more money their way.  And saying "pass a law so those elitist freeloaders pay their fair share!" is a way to improve their bottom line.  And like all companies, they want $$$ more than anything else.

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Some have proposed a solar rate that includes an "infrastructure fee" as part of the base charges. The intent is to remove any subsidy.

If you think the intent is anything other than "we want more $$$" then you have been successfully tricked by a successful PR campaign.  

You want truly fair?  Here's fair.  You pay by the hour; the utilities average the generation cost per kwhr every hour and charge you that directly, plus an additional percentage for distribution, overhead etc.  They report that cost, per hour, publicly (on a website or whatever.)  You also pay a basic monthly fee on the order of $10, $20 etc. so they can support things like billing even for people who use no power at all.

Then if you generate more than you use they pay you that same cost minus the percentage for distribution, overhead etc.  They make money selling power to you, and they make money getting power back from you.  

You can bet your bottom dollar that they will want more than that; they will want as much $$$ as they can pull out of you.  But if you want fair, that's the answer.

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8 hours ago, billvon said:

Only until they get to zero.  Then they get either 2.8 cents or (more commonly) zero cents.

This makes sense. They still pay a minimum charge that goes towards infrastructure.  But since the utility no longer needs to expand distribution or generation due to increased solar generation, the utility saves money overall.

Nope.  That's a common myth that some people use to attack residential solar.  "Why should I have to pay for my neighbor's solar?  I am paying his bill and he's paying nothing!"

Turns out not only is that not true, the opposite is true - residential solar saves money for the neighborhood.

"Scientists say solar panels lower peak demand on stressed traditional grids and have reduced the amount of infrastructure dollars that energy utilities must invest. . . . .Utilities have worried that solar panels increase the cost for surrounding homes, maybe based on the idea that these neighbors could be charged higher rates to compensate for “missing” electricity customers.  Instead, Pearce and Soulemane found that homes with solar panels are heavily subsidizing their local electrical grids—to the point that their research calls for regulatory reform."

https://www.popularmechanics.com/science/energy/a35474729/solar-panels-bring-down-energy-costs-for-everyone/

https://www.sciencedirect.com/science/article/abs/pii/S1364032120308832?via%3Dihub

Of course they are.  They are public utilities.  The only way they can make significantly more money is if a law is passed that sends more money their way.  And saying "pass a law so those elitist freeloaders pay their fair share!" is a way to improve their bottom line.  And like all companies, they want $$$ more than anything else.

If you think the intent is anything other than "we want more $$$" then you have been successfully tricked by a successful PR campaign.  

You want truly fair?  Here's fair.  You pay by the hour; the utilities average the generation cost per kwhr every hour and charge you that directly, plus an additional percentage for distribution, overhead etc.  They report that cost, per hour, publicly (on a website or whatever.)  You also pay a basic monthly fee on the order of $10, $20 etc. so they can support things like billing even for people who use no power at all.

Then if you generate more than you use they pay you that same cost minus the percentage for distribution, overhead etc.  They make money selling power to you, and they make money getting power back from you.  

You can bet your bottom dollar that they will want more than that; they will want as much $$$ as they can pull out of you.  But if you want fair, that's the answer.

Many points, as it works in SC:

1) A solar customer aren't paying any fee towards the infrastructure. They only time they contribute is when they buy energy. And the infrastructure is still needed because they are connected to the grid. When a cloud comes over at 3 PM on a 92 degree day the solar output drops almost to zero yet their AC unit continues to run. In the control room one can see the immediate impact of cloud cover, solar output stops and system demand immediately rises. 

2) The subsidy is quite clear. When the avoided cost is 2.8 cents yet the solar owner is paid 12 cents the subsidy is 9.2 cents. Every customer has a Distributed Energy Resource charge on their bill, it's a separate line item. There is no question it's a subsidy. There is no decrease in the infrastructure or the cost to the utility for a solar owner. Same transformers, same wire and same poles.

3) Utility rate making as quite complicated by overall easy to understand. When one removes all the clutter and just focuses on this one issue the subsidy is clear. 

4) As to fair. Other, non-regulated, utilities in the area use a time-of-use billing method. They set the on-peak hours and charge a demand fee. The winter hours are 6-9 am, and summer are 4-7 pm. The demand is calculated based on the hourly peak usage for the month during that period. The monthly bill is the demand charge, plus energy, plus an account charge. The demand is $12 / kW, energy is 5.15 cents, and the account fee is 95 cents a day. 

For a homeowner that does nothing to alter usage their bill will be about the same as it was under the previous kWh rate structure. For the homeowner that doesn't run the clothes dryer or electric water heater during peak hours the bill is quite lower. For the solar user that gets lucky and has no cloud cover during peak hours the bill is reduced. Of course that practically never happens over a 30-day period so their demand spikes. An 1800 sq ft house with a typical 2.5 ton AC unit will pull 2.5 - 3 kW. That's an incremental demand charge of $30 - $36. That's how the utility is compensated for the infrastructure cost.

This seems like a much fairer method to allocate costs. The solar user pays a demand charge and the energy credit, while still a subsidy, is much closer to the avoided cost of electricity.

Looking at the solar installations in the region, those areas with the time-of-use billing have a much lower number of solar customers than the area with kWh rates. The utilities with the kWh rates are simply trying to adjust rates to properly allocate costs. They have the data to show the subsidy because they do intensive metering on all types of customers.

It will be interesting to see what the Commission does with this one. They are charged with protecting the consumer and treating all consumers equitably. They have no responsibility to maintain a financial structure that provides a profit mechanism for the solar companies.

5) About billing based on hourly average generation cost. Yes, that would be an equitable method to cover all the bases. In SC we have an even mix of nuclear, coal, base load gas and gas turbines. In theory they are dispatched based on least cost. Of course there are other technical factors that impact that process.

Another argument has been billing based on generation source and proximity to the generator. Those closest to the nuke plant want that 1 cent power, and no share of the most expensive gas turbine that is 100 miles away. Those that are near the substation only want the transmission and distribution cost to their house since those lines are collectively 15 miles long. They don't want the system average cost. It's an interesting discussion for sure. 

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25 minutes ago, billeisele said:

Many points, as it works in SC:

...Those that are near the substation only want the transmission and distribution cost to their house since those lines are collectively 15 miles long. They don't want the system average cost. It's an interesting discussion for sure. 

Its too bad that Brent and others who deny science can't formulate argument with meat on the bones of the issues. Thanks for that.

"President Joe Biden rolled out his infrastructure package called the American Jobs Plan on March 31 in Pittsburgh, Pennsylvania. The plan includes a large investment in re-energizing the country’s power infrastructure and boosting renewable energy development.

The plan aims to create a more resilient grid, lower energy bills for middle class Americans, improve air quality and public health outcomes, and create good jobs, with a choice to join a union, on the path to achieving 100% carbon-free electricity by 2035."

All of which i agree with except the union support. i have nothing against them but they can rise and fall on their own merits without government tilting the bargaining position.

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21 hours ago, Bigfalls said:

Actually lightning is the cheapest source of electricity.  Now if we can figure out how to capture it and use it.  Shorting out all the wiring in your house and blowing up your TV isn't very cost effective.

But if you figure it out you've got 1.21 gigawatts.

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5 hours ago, billeisele said:

Many points, as it works in SC:

1) A solar customer aren't paying any fee towards the infrastructure. They only time they contribute is when they buy energy. And the infrastructure is still needed because they are connected to the grid.

He is paying in two ways:

1) He is paying cash towards a minimum monthly bill.
2) He is paying power towards the utility's other loads - and allowing the utility to avoid building out new distribution.  (That's what those two articles are about.)

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There is no decrease in the infrastructure or the cost to the utility for a solar owner.

Yes, that has been the belief for decades now.  Again, read the article.  Lower peak demand = savings for the utility.

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4) As to fair. Other, non-regulated, utilities in the area use a time-of-use billing method.

Yes, ToU goes about halfway towards that 'fair' pricing model.  It's still very much an estimate, and does not represent the actual costs to the utility, nor does it provide the necessary signals to deal with loss of generation, to deal with unexpected loads (hot day) or start/stop DR.   But it's a good start.

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They are charged with protecting the consumer and treating all consumers equitably. They have no responsibility to maintain a financial structure that provides a profit mechanism for the solar companies.

I agree.  And since they are charged with protecting the public, they also have a charter to reduce the use of dirty/dangerous technologies (coal for example) and reduce the generation of greenhouse gases, which in the utility world means using renewables and nuclear.  They have no responsibility for singling out solar; they do have a responsibility to drive a switch to renewables, of which nuclear is only one option.

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3 hours ago, billvon said:

He is paying in two ways:

1) He is paying cash towards a minimum monthly bill.
2) He is paying power towards the utility's other loads - and allowing the utility to avoid building out new distribution.  (That's what those two articles are about.)

Yes, that has been the belief for decades now.  Again, read the article.  Lower peak demand = savings for the utility.

Yes, ToU goes about halfway towards that 'fair' pricing model.  It's still very much an estimate, and does not represent the actual costs to the utility, nor does it provide the necessary signals to deal with loss of generation, to deal with unexpected loads (hot day) or start/stop DR.   But it's a good start.

I agree.  And since they are charged with protecting the public, they also have a charter to reduce the use of dirty/dangerous technologies (coal for example) and reduce the generation of greenhouse gases, which in the utility world means using renewables and nuclear.  They have no responsibility for singling out solar; they do have a responsibility to drive a switch to renewables, of which nuclear is only one option.

Again we professionally disagree. And my comments are specific to SC not CA or other areas.

1) The solar guy on the kWh rate pays nothing towards infrastructure if he generates 100% of his power. The infrastructure cost is collected in the kWh rate. That's a good reason to separate those costs into the components and bill accordingly. The minimum bill is $9, pays for metering and meter reading.

When it's cloudy, rainy or dark, and he takes energy there is a payment towards infrastructure but it isn't sufficient to cover his share of the cost. 

Most of the systems are too small to meet 100% of the load requirement so on a monthly basis they are takers. I don't know the stats on that.

2) When he puts to the system he is paid full retail and his energy flows to the neighbor that is billed full retail. Therefore the utility collects nothing for accepting or transporting his power. The utility has to build, operate and maintain the system that allows the solar guy to get paid while the utility collects nothing. They don't avoid building anything, the infrastructure is the same.

I read the articles and similar ones. Too many assumptions are used and it's not how the real system operates. When solar has zero output the utility still has to deliver the full requirements. Can't do that if the infrastructure was down sized. We don't have rolling black outs or brown outs like other areas of the country.

In SC we aren't seeing a lower peak demand due to DR. We are seeing less energy sales, the same peaks, less revenue from reduction in kWh sales, less revenue due to payment subsidies, and an increase in revenue from the DR charge. I don't know if the DR revenue is more or less than the lost sales plus solar payments.

Our Commission does not have the social welfare requirements that CA has. They don't have the charge of GHGs but they do have the charge to keep rates as low as practical. It's also not their charge to subsidize DR. That's a huge balancing act when they know that renewables (for now) result in higher average rates. When solar first started they thought it would be a blip on the map and no big deal. They didn't believe that solar sellers  would flood the market and do crazy ads promising free power and no utility bills. They thought the vendors would be honest. The horror stories are large in number and fairly bad. I'm sure there are good stories but I'm hearing so many bad ones.

People can't sell their homes without removing the panels because the contract sticks with the original people and the buyers won't agree to accept the contract because of the problems in the contract. The solar vendor has to approve the transfer of the contract to the new owner and some are being rejected. Roofers are charging $500 - $1,000 per panel to remove and reinstall them and there is no warranty on the roof. Some roofers refuse to touch them. I assume that is a learning curve thing but for now it is a real problem.

I have a jumper friend that installed solar. Overall the system itself has operated as stated. The problem is they sold him on converting his lighting to LED, adding attic insulation adding reflective film and an exhaust fan. The non-solar work they did was done at almost twice what it should have cost (how do I know? I've done a couple million dollars of that type contracting). The attic insulation, film and fan are duplicative. Yes, he needed more insulation but that was all. The fan added more load and justified an additional solar panel. His monthly payments go for 12ish years and there is no warranty on the equipment. Guess who gets to pay for the inverters when they fail in 8-10 years? They are 40-50% of the total system cost. That means he will be lucky to get a payback on the system and house improvements before the panels fail. And that is with the full retail subsidy. The vendor screwed him big time. I've seen this same thing too many times.

The residential demand rates being used are not true TOU rates. TOU is much to complicated for most to understand and there is the real possibility of what happened in TX a couple months ago. And then who is going to monitor an electronic bulletin board where hourly prices are posted? And when dramatic system changes can drastically shift the price? The large commercial and industrial customers that are on TOU or interruptible rates had to submit an application showing that they had the ability to shut down or reduce load down to a firm demand level before they were allowed to use those rates. Even then they goof up and complain about the utility bill.

It's difficult. People want simple rates that are easy to understand that result in predictable power bills. But they also want other options that require more complicated rate structures but aren't willing to listen or understand the reasons.

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8 hours ago, Phil1111 said:

The plan aims to create a more resilient grid, lower energy bills for middle class Americans, improve air quality and public health outcomes, and create good jobs, with a choice to join a union, on the path to achieving 100% carbon-free electricity by 2035."

All of which i agree with except the union support. i have nothing against them but they can rise and fall on their own merits without government tilting the bargaining position.

Phil - All good ideas but anyone that has been involved in "resiliency" projects knows that it's quite expensive. The carbon free goal infers nuclear or renewables both of which are usually more expensive than existing generation sources. Don't know how these goals are possible along with providing lower energy bills. Of course it sounds wonderful and for the vast majority that don't have a clue about the costs life just rolls on. We certainly agree on the union issue.

One thing for sure the future will be quite interesting as the costs become more visible.

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5 hours ago, billeisele said:

Again we professionally disagree. And my comments are specific to SC not CA or other areas.

1) The solar guy on the kWh rate pays nothing towards infrastructure if he generates 100% of his power.

If he generates and stores his power, and uses nothing from the grid (and adds nothing to the grid) - I agree.  But in that case he doesn't need to be connected anyway.

Most people who install solar do grid tie without storage, and most generate less than they use.  In that case they are still paying bills.

Rarely someone generates as much as they use.  In that case they are paying the monthly fee and that's it.  So the utility gets excess generation during the day when demand is high and they need it, and the utility provides power at night when they need to keep running base load plants (stopping/starting them is almost more trouble than it's worth if they are not needed.)  The utility still gets paid, the homeowner still gets the benefit of not needing storage.

In the very rare case where they generate MORE than they use, then usually they get nothing back.  The utility gets free power and still gets to send them a monthly bill for the minimum charge.  The utility wins again.

About the only time the utility does _not_ win is when the agreement allows the homeowner to sell back power over and above the power they use.  How that is handled is up in the air right now.  In grids where load is beginning to exceed supply, the utility paying for that excess may well be cheaper than the cost of a new peaker.

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In SC we aren't seeing a lower peak demand due to DR.

Your demand response program does not result in reduced demand?  I'd say there's something wrong with it, then, since that is its one and only purpose.  It's like saying "yeah, our car has brakes, but you don't see the car's speed drop when you use them."

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It's also not their charge to subsidize DR.

I'd say if they decided to spend money on peakers instead of effective DR, and that results in higher costs to ratepayers, they have failed at the charge to keep rates as low as practical.

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Guess who gets to pay for the inverters when they fail in 8-10 years?

Inverters don't fail after 8-10 years.  We have ancient 25 year old low frequency inverters here and they have been going strong all that time.  On my old house (a rental for a while, now sold) we are nearing 20 years with a newer high frequency inverter.  And outside of the display window turning all yellow and illegible from being in the sun - it's still working well.

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They are 40-50% of the total system cost.

They are about 6% of the total system cost.  They cost about $0.18 cents a watt for the most common sizes (4-7.6KW); most systems nowadays are about $3/watt installed.

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The vendor screwed him big time. I've seen this same thing too many times.

Yes, some salesmen/installers are scumbags.  Nothing unique about the solar industry there.

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And then who is going to monitor an electronic bulletin board where hourly prices are posted?

A free app you download.  If you want to pay for the upgraded version they guarantee you even more savings.

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And when dramatic system changes can drastically shift the price?

Then the system raises the thermostat temperature by 2 degrees.  Or turns off the pool pump.  Or shuts off the electric water heater for an hour.  Or shuts off the fridge for an hour.

And the upgraded version has an analyst who is always looking at the day-ahead forecast and making sure that if the prices are going to blow up, the air conditioning precools the house before the high prices hit, so you barely notice the interruption in A/C.

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It's difficult. People want simple rates that are easy to understand that result in predictable power bills. But they also want other options that require more complicated rate structures but aren't willing to listen or understand the reasons.

Yep.  People aren't going to want to know the details.  They are going to want to know "hey, does this plan you are trying to sell me work with my Wattmaster app on my phone?  If so, sign me up."

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55 minutes ago, brenthutch said:

If solar is so cheap, wouldn’t market forces alone drive its adaptation?  We didn’t need a big government program to facilitate the switch from whale oil to kerosene.  

If the Interstates were such a great idea why did the US government have to build them? Surely "market forces" would have built them.

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6 minutes ago, Phil1111 said:

If the Interstates were such a great idea why did the US government have to build them? Surely "market forces" would have built them.

There is no need for massive infrastructure to put solar panels on your roof and a battery in your garage.  Simple, easy, cheap and you get to save the planet.  A win win win win.

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1 minute ago, brenthutch said:

There is no need for massive infrastructure to put solar panels on your roof and a battery in your garage.  Simple, easy, cheap and you get to save the planet.  A win win win win.

Brent that doesn't make sense. If you start a paragraph with some sort of premise. You're argument should conclude with some evidence or some sort of supporting thought.

So I take it your return from Florida didn't include any excess viral baggage?

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4 hours ago, brenthutch said:

If solar is so cheap, wouldn’t market forces alone drive its adaptation?  

If SpaceX is so cheap, why did we need the Mercury, Gemini and Apollo programs?  Or the Space Shuttle? 
If trucking and driving are the best ways to move people and things, why did we need the US Interstate program?
If the Internet is so great, and so much commerce moves over it, why did we need the government to develop it?

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We didn’t need a big government program to facilitate the switch from whale oil to kerosene.  

?? They needed billions in subsidies.  The first tax break for oil drilling companies came in 1916.  If kerosene was so great, why did oil companies needed subsidies?

 

OilSubsidies.jpg

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4 hours ago, brenthutch said:

There is no need for massive infrastructure to put solar panels on your roof and a battery in your garage.  Simple, easy, cheap and you get to save the planet.  A win win win win.

There was no need for massive infrastructure spending to buy a car.  Build a road between your fields and your barn.  Simple, easy, cheap and you get a car!  Win win win.

There was no need for massive infrastructure spending to buy a truck, either.  Buy the land between your factory and your stores, build roads - and you are good to go!  Simple and easy; win win win.

If only they had you back then to tell Eisenhower how stupid he was being.

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3 hours ago, billvon said:

There was no need for massive infrastructure spending to buy a car.  Build a road between your fields and your barn.  Simple, easy, cheap and you get a car!  Win win win.

There was no need for massive infrastructure spending to buy a truck, either.  Buy the land between your factory and your stores, build roads - and you are good to go!  Simple and easy; win win win.

If only they had you back then to tell Eisenhower how stupid he was being.

What massive infrastructure is required to connect rooftop solar panels to a battery in the garage?

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