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But you are not stimulating demand. You are ordering people to purchase something. That is not demand. That is a mandate, an order, or coercion. A diktat.
The Beatles sold and continue to sell a lot of music because it is in Demand i.e. because people like it and want it- they DEMAND it.
Nobody ordered them to buy it.
Hey, I want the same thing that the California government does. Everybody does. But I have run the numbers several times re solar for my own home and it does not add up.
Someday it will, if the State stays to the side.
We might have different perspectives on the definition of demand. Buildings are required to have smoke detectors in California and I would still consider the smoke detector market to follow laws of supply and demand.
We might have different perspectives on the definition of demand. Buildings are required to have smoke detectors in California and I would still consider the smoke detector market to follow laws of supply and demand.
My definition is the classic Economics definition.
Smoke detectors are a poor analogy. The smoke detector is an established, cost-effective product. It is also not very expensive and has great utility. It is something most people would buy anyway. They are not required where I live yet I have them in nearly every room.
Solar Panels are incredibly expensive and the industry is still in the embryonic phase. California is not going to get around that.
My definition is the classic Economics definition.
Smoke detectors are a poor analogy. The smoke detector is an established, cost-effective product. It is also not very expensive and has great utility. It is something most people would buy anyway. They are not required where I live yet I have them in nearly every room.
In the early 1970s smoke detectors cost about $125 (or about $720 in 2018 dollars) and only sold about a few 100k/year. In 1973, California began requiring at least one smoke detector in every home. By 1976, smoke detector sales had jumped to around 8 million and the price dropped to around $30 due to concurrent innovations in the electronics and alarm mechanisms.
In the early 1970s smoke detectors cost about $125 and only sold about a few 100k/year. In 1973, California began requiring at least one smoke detector in every home. By 1976, smoke detector sales jumped to around 8 million and the price dropped to around $30 due to concurrent innovations in the electronics and alarm mechanisms.
That is not how I remember things.
Were this true, why would government not simply force everyone to buy anything it deemed necessary?
Because you end up with the USSR. Even Putin does not want that.
If all that was standing between Solar displacing Fossil fuels was all of us being mandated to buy it, then Uncle Sam would do it with all of us cheering it on.
California is acting out of emotion and wishful thinking. And it will harm the industry.
Were this true, why would government not simply force everyone to buy anything it deemed necessary?
Because you end up with the USSR. Even Putin does not want that.
If all that was standing between Solar displacing Fossil fuels was all of us being mandated to buy it, then Uncle Sam would do it with all of us cheering it on.
California is acting out of emotion and wishful thinking. And it will harm the industry.
Again, I'm not the biggest fan of this move. I've read my Hayek, Friedman, Sowell, etc. and at one point I probably would have been railing against this as much as anyone else on this thread.
These days I'm more pragmatic than idealistic. These types of moves likely backfire in the vast majority of scenarios, but:
1. I think Solar is probably 80%-90% of the way to where it would become compelling on its own, and
2. I see examples like the smoke alarms where the legislative nudge seems to have worked...
I'll sit back, cross my arms and root for the policy to be successful.
2. I see examples like the smoke alarms where the legislative nudge seems to have worked...
If you wanted to use the smoke alarm as an analogy the existing ones are cheap, reliable and well established. Let's suppose someone invents one that will detect smoke just as well and is less polluting when opearting but has the major downside of operating only part of the time and is more expensive. You still need to buy the old alarm, you may not have to leave it on all the time but you still have to buy one.
Smoke alarms are a poor example, they were a product that did something new that was highly desriable. Solar panels can't even fully replace the existing product.
If you wanted to use the smoke alarm as an analogy the existing ones are cheap, reliable and well established. Let's suppose someone invents one that will detect smoke just as well and is less polluting when opearting but has the major downside of operating only part of the time and is more expensive. You still need to buy the old alarm, you may not have to leave it on all the time but you still have to buy one.
Smoke alarms are a poor example, they were a product that did something new that was highly desriable. Solar panels can't even fully replace the existing product.
Unfortunately, my knowledge of legislation isn’t encyclopedic. As you alluded to, you might be able to find a comparison with other environment-friendly regulations like CARB (making a product more expensive in order to reduce pollution). Did it foster innovation, or hinder it? I think it drove additional R&D into efficiency and alternative fuels, but I’m not a car guy, so I couldn’t say one way or the other with any authority.
Unfortunately, my knowledge of legislation isn’t encyclopedic.
To understand my point you only need to understand a few basic things. When the sun is not shining other sources of power generation are ramping up across California to provide that demand. The less a power plant runs the more inefficient it is and more importantly because of the capital investment the less it is utilized necessarily causes the cost per kWh to increase.
To put this into yet another analogy if you had a requirement for a vehicle that was going to run nearly 24/7 the obvious choice is a gasoline powered car. Buying an additional electric car that can be run for 3 hours does not negate the need to buy the gasoline powered car that can already meet your needs. Your capital investment has doubled and since the capital investment on the gasoline car is spread over fewer miles it's costing you more per mile to run that as well.
In Germany there is occasional days they can power their entire grid with solar and wind if the weather conditions are right. They pay about 35 cents per kWh.
To understand my point you only need to understand a few basic things. When the sun is not shining other sources of power generation are ramping up across California to provide that demand.
Isn’t battery technology (or other storage technologies) being developed in tandem with solar? I thought that as solar penetration increases, so does storage demand... with the trend/goal of replacing peaker plants with storage. So the same mechanisms that would move the solar market should indirectly move the storage market.
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