# Electric cars are a pipe dream

Discussion in 'General Science & Technology' started by Syzygys, May 20, 2010.

1. ### billvonValued Senior Member

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Home Power magazine, issue #142 (April 2011) page 121:

Arthur

11. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

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Yes the cost to deliver power to the customer and cost of back up for his PV system if he has one is what should be charged to the customer but ALL subsides* must be removed when calculating this cost. I noted that the fact that PV enegry should get extra credit for being a clean source, when the cost accounting is fairly and honestly done:
*If you grant me enough subsidies I will prove it is economical to grow banana on the north slope of Alaska! ALL SUBSIDIES MUST BE REMOVED if one wants the free market to chose what is truly the most economical way to deliver anything, energy included.

The US uses subsidies, often by tax credits, to run a very "centrally planned" economy, but does not like that fact stated that way. For example, "Big Brother in DC" has decided that American should be home owners, not renters, so interest payments on your mortgage are tax deductions, but none of your rent. Much of the current economic crisis is a direct result of this decision by Big Brother and his tax credit central planning. This plus few toll roads** has also built "suburban sprawl" (very energy inefficient) instead of urban parks, high rise apartments, and public transport, which the US will regret in the coming high cost of petroleum era. Now the average food item on your table travels 1500 miles to get there. Before suburbia was paved over that distance was smaller and the food was genetic selected for taste and nutrition etc, not store shelf life or size uniformity for packing, etc.

** No toll booths that need to be manned and waste energy with a stop and start, but a bar-code in the window etc systems. Then private enterprise could build the roads, not all the tax payers, even those without cars. Except for needed services that benefit all, like public schools, the FDA, the police and firemen, etc. I favor "user pays" systems when possible.

Last edited by a moderator: Mar 9, 2011
12. ### adoucetteCaca OccursValued Senior Member

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Ah, but I used national figures and nationally the kWh charge is only 11.8c, so no, we are a bit over 1/4 of the bill.

The point is that these home PV customers can only affect this part of the total cost, so you have to put their possible impact in perspective, and this number helps you do it.

Typical feed in tarrif rules for residential users don't allow this, residential customers don't get a check from the power company, indeed when you size a system for grid tie you don't want to make it too big because it just ups your up front finance costs, so ~70% of your use seems to be about right as it keeps your annual costs roughly equal to the cost of the electricity you displace. What I do expect will eventually happen as the amount of PV goes up is that your feed in tariff rates won't spin the meter backwards at a rate equal to the retail price of electricty, but at the fuel cost for the electricity, ie you don't get credit for the infrastructure costs. What this would do would be to keep the PV installations to ~60 to 70% of usage since spinning the meter backward would get you far less then it does today, indeed with peak metering, you may only see 50% or so being the sweet spot for PV.

I don't ignore it, but current rules don't charge for it, and the analysis shows that now and for a long time in the future it is so small a percent of the total generation/transmission cost that the "revolt" you suggest will never materialize.

No Billy,the entire point was to show that for a retail consumer in much of the Southwest, given the current rate structure and existing rules makes PV a good investment. The second longer analysis shows that even if PV expands dramatically over the next several decades among residential customers it still won't have a big impact on the existing cost structure because the share of the pie is just not that big. Thus your revolt is unlikely.

Arthur

Last edited: Mar 9, 2011
13. ### X-Man2We're under no illusions.Registered Senior Member

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My question in post 1466 could be an expense to the customer (public?) either on or off your monthly bill.To be clear when using fossil fuels/coal, I was referring to any cost to the customer or public that we wouldn't have with renewables.Example could be possibly something like us having to pay some extra tax or some extra charge on the commodity itself to contour the negatives of using non-renewables.I was trying to go farther with this than just comparing non-renewables to renewables on your bill.Is there cost to us as a society that effects us all using non-renewables that make paying more now for renewables worth it?Of course renewables cost more,heck their in their infancy and as with anything new the price is highest at the front end.

Last edited: Mar 9, 2011
14. ### adoucetteCaca OccursValued Senior Member

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There are always costs, renewables or not.
Indeed, by far the biggest renewable we use is Hydro and you will find there are a lot of environmental costs associated with that, the second largest is bio-mass, and it's not as clean as natural gas or new coal plants.

As to being in their infancy, nah.

Wind is in the 5th or 6th generation of turbines and they are awesome devices with massive blades on towers that they can now mount way out at sea.

PV has dropped the cost of the panels to nearly \$1 per watt and modern Solar Thermal is very advanced.
The cost problems aren't the technology, just that the "fuel", while free, is very diffuse and often not near population centers.

Arthur

15. ### billvonValued Senior Member

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And all externalities must be factored in. Tax breaks are one way to do that.

If you do not have a choice as to whether to install solar or not (i.e. the Federal government dictates that you must) you could reasonably call that a 'centrally planned' power system. However, providing incentives to do something does not make it a 'centrally planned' power system, any more than printing coupons for toilet paper in an ad makes ours a "centrally planned" economy.

16. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

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Yes that cost to society is the correct approach. There are many costs that are not included in the cost of gasoline fueled cars - Health expenses being a major one.

As I said before, if the free market is to make the correct system choices, then not only must ALL subsidies be removed but all the cost to society must be included. The US does not really have a "free market" - it has a centrally planned economy with Big Brother in DC deciding what the price to the customer is usually by tax credits, but also by grants to politically well connected industries. See the foot not of my post 1470 for example of how badly Big Brother's home mortgage tax credit has hurt the US even now being the main cause of the economic crisis but more damage yet to come in the expensive petroleum era.

17. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

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No I would call that a dictatorship.
To the extent that big brother in DC, "shapes" your choices with net prices distorted away from what the free market would set with true cost of product and services included in the price it is central planning.

A coupon in a local paper is free enterprise in action, not central planning. The enteriprise hopes that the volume increase by the coupon use will compensate for the coupon discount and the newspaper charge or at least get more future full price sales with better "name recognition" etc.

18. ### X-Man2We're under no illusions.Registered Senior Member

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Thanks Billy,

Iv'e read big oil is subsidized massively,if that's true then arn't US citizens paying for the subsidy in a round about way? If so it probably makes average joe think he's getting a great price on oil,gas etc.when in fact the joke is on him.

And like you mentioned the healthcare cost.What is that cost? Million? Billions?

Heck we can go farther and add "Oil Wars" The dollar cost and the human toll.
(If were overseas due to oil)

Renewables suddenly look cheap,or at least competitive.

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20. ### billvonValued Senior Member

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Given that at best such policies make small adjustments to the economy, you'd be hard pressed to call that 'planning.'

It is artificially changing the market, and distorting it away from what prices a free market would set, with the true costs of the product hidden by the coupon.

It sure sounds sinister when you put it like that, eh? All it's doing, of course, is letting a retailer sell some merchandise that's not selling by artificially lowering its price. If someone else has a much better deal, then consumers will gravitate towards that, coupon or no - so claiming that there's a "master plan" would be overstating things a bit.

Likewise, the government often uses tax/rebate/service incentives to "sell" products that are not "moving" (and that we, as a society, feel are important.) Renewable energy is one. Military service, child care, home ownership etc are others.

I agree that ideally the government would not be involved at all, and that external costs would be factored in to the price of the product. Unfortunately that won't happen without government intervention; if there were no government controls on emissions, for example, LA would not be habitable due to the amount of pollution in the air. Due purely to the free market, of course; catalytic converters and stack scrubbers aren't free, and thus a company who builds equipment without pollution controls wins in the end in a purely free market.

To deal with this you can:

1) Mandate the change. (I believed you referred to this as a "dictatorship.") Require catalytic converters and power plants that meet clean air standards, and shut them down (by force if necessary) if they don't meet them.

2) Use market forces to accomplish the change. Fines for CAFE violations and tax incentives for solar are ways to accomplish this.

Generally I prefer 2). It gives you a lot more freedom overall.

21. ### F-X♫♪ Mostly Harmless ♫ ♪Registered Senior Member

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In the strange world of "I'm not sure what to call it", tax breaks for oil companies isn't a subsidy, but a tax break for installing solar or wind power is.

22. ### Billy TUse Sugar Cane Alcohol car FuelValued Senior Member

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I don't think we have strong disagreement, but I don't think it is the government's job to "sell ideas /things" It is the government's job to try to make sure all the actual cost to society are included in the price of the products and services. Then the free market cn correctly chose those with the highest benefit to cost ratio, and no doubt will.

I thought your toilet paper coupon not an example of central planning as Big Brother in DC had nothing to do with the decision to spend money that way instead of TV ads or free samples, etc. - that was a free enterprise choice and I am all for that. I just want the government to make a "level playing field."

For example, if white toilet paper costs no more to make than natural color toilet paper because the maker is allowed to dump the used bleach in the local river, then the government is not doing its job; However if the buyers want white toilet paper and not the natural tan and buy so much more of it that the per unit cost of production, even with proper disposal of the bleach cost included, then fine. That is the current conditions, AFAIK.

I don't think that subsidies should be built into the tax code - but open and with termination dates and only used to get some new product off the ground, if studies show it can in fact be the more economical choice for society and once established will automatically be the free markets choice.

A good example of this is basic research support, which is an "up front" subsidy to an expected new industry or service but only if there is no private firm wiling to make the need "up-front" investment. The internet is an example of well used government "up-front" subsidy.

23. ### billvonValued Senior Member

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OK. So how is this accomplished? Let's say that we determine that Substance X is a bad thing, but is commonly emitted in the manufacture of many products. How does the government ensure that the cost posed by Substance X is incorporated into the cost of the product?