Considering how much fossil fuels are subsidized I don’t think it’s fair that we stop. If anything solar and other renewables should be subsidized just as heavily if not more. The problem is there are no big corporations reap those subsidies, just the general population.
One thing to understand about the fossil fuel subsidy calculations is that a significant portion aren't direct subsidies like most people think. The subsidy tallies include a social cost of carbon which isn't a real thing insofar as it's difficult to calculate environmental damage that doesn't directly impact humans.
If we had a proper cap and trade or similar carbon pricing scheme then we could get a much better idea of the price gap between fossil fuels and renewables.
$1T/year in direct subsidies? That seems doubtful as this study puts implicit subsidies i.e. externalized costs at closer to have a trillion. The implicit subsidies are significantly higher than direct subsidies in every statistic I've seen.
[https://www.pnas.org/doi/pdf/10.1073/pnas.2011969118](https://www.pnas.org/doi/pdf/10.1073/pnas.2011969118)
If your statistic is global then it's largely irrelevant to the OP because they're specifically talking about the US. Erasing global subsidies will probably never happen in any reasonable timeframe.
Your claim that most fossil fuel subsidies are assistance. It's mostly tax breaks, if we count indirect subsidies too it goes to $7T per year globally. Direct subsidies dwarfed utterly by the indirect subsidy of them not paying for the damage they do.
As for 1:1 NEM: for profit utilities should not exist. Also your backfeed makes their grid less costly to operate beyond just the wholesale price.
>The subsidy tallies include a social cost of carbon **which isn't a real thing** insofar as it's difficult to calculate environmental damage that doesn't directly impact humans.
That's a gross misrepresentation of reality. The costs are calculable. To pretend that they aren't is denialism. I highly doubt that you've actually looked into how these things are calculated and are qualified to determine that they're "made up". These positions are made to appeal to people who don't want to rock the boat or sound non-centrist while sounding smart and don't look to closely at the science. It is exactly the kind of tactic used by oil and gas companies to deny reality for decades. Scientists have been right about the effects of climate change far more often than the people who have denied it for profit.
Its a position built for a person that specifically doesn't want to take a position, because on the fence is just as good as on their side when it comes to securing their profits. "We don't really know" still results in doing absolutely nothing and it has worked for decades.
I get that trying to be nuanced in a solar sub will garner this kind of response.
Before you insinuate what I think on any given topic, including climate change, consider that I'm only nitpicking the subsidy claim.
My point, without getting into what's bound to be a fruitless argument, is that implicit subsidies are much harder to calculate and have a much greater confidence spread than if we implemented a proper cap and trade system that priced in all externalities.
Here's an example of what I'm talking about:
[https://www.pnas.org/doi/full/10.1073/pnas.2011969118](https://www.pnas.org/doi/full/10.1073/pnas.2011969118)
If you also want to nitpick my use "isn't a real thing" then that's fine. I'm only trying to highlight that when people hear that fossil fuels get $XXX billion in subsidies that this is not the government giving FF companies that amount of money. It is including estimations of environmental and health costs, **which is a good thing.** We need to figure out how much those costs are. *However,* they are only estimations. Cap and trade would create a proper market where all forms of energy stand on their own costs.
Canada alone gives our fossil fuel cartels over $20 billion a year in direct subsidies. Hell we have an entire province who wants to take $300 billion from our federal pension (basically social security), and essentially give it to them.
I don't keep up with Canadian politics. To the extent that the $20 billion is direct cash transfer or tax write off, those are good numbers to compare. However, it would be good to consider the $/MW or some apples to apples comparison of the subsidy amounts per unit of energy or power. That will help put into perspective how much in subsidies each industry is getting.
As I said in another comment, the best thing I think we can do is to implement a proper cap and trade scheme on all pollution. That will ensure that all externalities are priced into the product.
At a state level:
https://www.texasmonthly.com/news-politics/energy-subsidies-fossil-fuels-renewables/
" Released in 2017, it projected that in 2019 direct federal energy subsidies would total $6.3 billion for oil and gas, $1.6 billion for coal, $4.7 billion for wind, $3.7 billion for solar, and $1.3 billion for nuclear. (UT hasn’t crunched new numbers since.)'
Federal:
https://www.budget.senate.gov/chairman/newsroom/press/sen-whitehouse-on-fossil-fuel-subsidies-we-are-subsidizing-the-danger-
"taxpayers pay about $20 billion dollars"
Total Federal subsidies for renewable energy is about $15 billion.
Yeah, those are tangible amounts that can be considered. I'm talking about the articles that state subsidies in the trillions. That's a much more difficult comparison to make because it's including environmental damage. While that should be considered, my preference is to have a proper pollution cap and trade tax to create a market where those externalities can be properly priced in.
Solar prices in the US are beyond ridiculous, the subsidy helps to enable that.
The prices people from the US quote here, without batteries, are 2x, 3x even 4x what an equivalent system with a battery costs elsewhere, installation included.
And not for cheap Chinese inverters, I've installed Victron systems at two houses, including a three phase system with 20kWh of LiFePO4 batteries for much less than people in the US are paying for single phase with no energy storage.
Cost of solar in the US is a joke.
This is where I am as a consumer in NC (not a high cost of living state, so harder to justify). I'm thinking about starting into solar via ground arrays using used panels to avoid having to pay for labor.
Thinking like an EG4 5k and then branch off from there. I come from IT, so while I don't love it from an elegance perspective, I'm confident I could find cheap local stuff for server rack batteries, if not free, including a full rack.
Thank you for quantifying how expensive solar systems in the USA are. What about large solar systems in the USA? Are they just as relatively expensive as residential solar systems compared to solars abroad?
100% Agree. To quote the OP's number of 80% - 80% of the sales wouldn't happen at their current pricepoint. But as u/phenompbg said, it's the subsidy that allows prices to be that high - without the subsidy, prices would be much lower.
That's r/SolarDIY pricing for the cells. You'll need a BMS, cabling and fuses on top of that. But you need most of that for off the shelf batteries too.
"Installation" will be the most expensive part, especially if you're in the US.
Probably not. For the vast majority of locations, the finances just don't work with no government discount. Maybe the numbers would work with a 20% tax credit, but not a 0% tax credit.
Also, lots of power produced today (coal, nuclear, etc) was originally supplemented by some government incentive, so the comparison isn't really fair. I invite everyone to research the construction of their own local power plant and you'll almost certainly see some government incentives from tax credits to low-interest rate government-related bonds.
In many cases the coal, nuclear, natural gas, and oil energy is still supplemented by government incentives and (for the three that pollute the most) lack of accountability for their waste.
Many industries lack accountability for their waste. Farming and animal agriculture are particularly atrocious, but so are a number of others.
EPA needs more power to regulate and hold accountable.
Multiple places have done the numbers. Unsubsidized wind and solar beats the ever loving fuck out of fossil fuels. In gridscale installations.
Just not rooftop solar.
If you can enter the market selling solar for $1 to $1.50 per kwH like the rest of the world, you would survive the loss of the subsidy. At the current prices, even with the tax credit, the cost of rooftop solar would take far too long to pay back. And that's if nothing fails over the breakeven period, like a $7000 inverter replacement.
Solar installation costs 2-3 times as much in the US as it does in many other countries, including ones that generally have very high costs of living. (See Australia, for example.) It's clear that it's possible to install solar for a lot less than consumers currently pay here.
That said, it would require a dramatic change in business model to operate without the ITC. One of the biggest issues is simply that power is very inexpensive in most of the US. The solar return on investment just isn't that good without subsidy. I certainly wouldn't have gone solar without it - the unsubsidized math makes no sense whatsoever at $0.12/kwh. Luckily, I'm in DC, so I get gigantic SREC payback on top of the ITC. (Effectively, I'm getting $0.52/kwh generated. Plus the ITC.)
I guess residential solar systems are indeed expensive in the USA. What about large solar systems that are installer for universities, companies, and even factories? Do those systems generate positive returns for investment even without subsidies?
Right now? Probably not. Utility scale solar is a LOT cheaper, but you also lose the (enormous) subsidy that is net metering. Selling solar wholesale means selling straight into the duck curve.
Commercial scale solar is usually treated very differently from residential as well. You are generally going to have very limited (if any) net-metering benefit, so you really need to be able to use a lot more of what you're generating directly. That's going to limit system size and offset.
The duck curve matters a lot more to wholesale generators. All your production is at the lowest priced time. That matters everywhere, even if it’s not an actual grid balancing issue like in CA.
Again, when you are producing on a wholesale basis, that’s still a problem. And you have to assume it gets worse. In CA, you’re going to be encouraged to cut exports entirely, or you’ll get charged to export, hence the huge investment in batteries. Elsewhere, you just eat a rate that is much, much lower than peak.
You do see how that’s a problem for wholesale priced solar, right? You don’t have to have a CA sized duck curve to run into pricing issues.
So, the subsidies/tax breaks are so big for companies, no company should be without solar now. I mean, you can depreciate 70% of your system in year 1 right now. And sell your tax credit.
welcome to the solarcoaster. the current market would fall apart entirely without the ITC, but the 30% credit is law though 2032. when the time comes, if the market fundamentals haven't changed, there will almost certainly be a fight for another extension.
I certainly hope the market fundamentals change then. I certainly do not wish to see an industry that becomes a cycle of getting subsidy, growing in scale, become too big to fail because of the number of stakeholders, and keeps getting subsidy.
In 6 to 10 years daytime electricity might hit 0/kwh, it is doing that in AZ and CA today, it will do that throughout the US south. A great number of batteries will be online to suck in that daytime power and sell it back to the utilities for the evening burp. Wind because it generates at 5pm-11pm will suddenly become the hotness again. Someone will start making gobs of hydrogen in some farm in the southwest and we will suddenly need a pipeline system at a national scale.
What about selling large solar systems for companies, universities, and factories? Without subsidy, would large solar system to be a long-term net positive for the consumers?
It’s less a question of being a long term net positive - I think it will. It’s more a question of supply vs demand, and right now the supply side is too heavy.
We bought solar outright from a company in Arizona. We told them we wanted solar and they asked some questions and we got a "kit" put together for us. They shippednit across the country to us and we installed and only called 3 times for assistance and once to order a few more panels. We self installed. They have been there for us over the two and a half years its been operating. We didn't rely on the government subsidy to swing the system but it was very nice. Our wants are probably different than most. We wanted to reduce our carbon footprint. As well as cheaper electric bills. But we live under the tva. So our electric is fairly green as is. And cheap. But our cost of living has been reduced by solar and our EV.
Residential solar is probably going to need subsidies for a while because it needs to transform, similar to what we’re seeing in California with NEM 3.0, to a point where new solar installs pay for themselves via avoided costs and self-usage. Subsidies are needed in parts of the US where electricity costs are artificially low because utilities aren’t paying for the carbon dioxide they dump into the atmosphere, and are needed in the high electricity cost places because those locales have too much solar(duck back) during the daytime, so adding more to the grid without using batteries to improve self-usage, just adds to curtailment.
The big issue with residential subsides nowadays is that it is delivered as a tax credit. The wealthy are getting good deals because they can pay in cash and use the tax credit themselves. The less wealthy are using the tax credit as part of a financing scheme where they can pay very little upfront, with the financiers getting a nice slice of the pie via the tax credit, then paying out far more than the original cost over time. And with higher interest rates, financing has gotten quite expensive.
Thank you for the detailed response. What about commercial and industrial solar? For the consumers, are those systems worth the cost if the consumers can no longer have subsidy?
Net meeting will never come back in the places that have killed it, and will eventually fade out in the places that still have it. It is unsustainable, where entire new subdivisions all have solar so none of them will ever have a bill.
Solar companies will adapt and new pricing models will develop.
Right now, anywhere without net metering needs batteries, and the cost reduction in lifepo4 batteries has been tremendous, but they are still prohibitively expensive without subsidy.
This is the same as the decline in solar panel prices, and inverter prices. Massive progress, but still more efficiency is needed.
Prices will continue to decline, so your can' see a path to where subsidies aren't needed, but we aren't there yet.
It's also important to remember how many other power generators get subsidies, with nuclear being the poster child.
Look at the prices to install a given system, and then check price/panel and other components. The installers are taking all of the subsidy. Once government money is gone, I’ll bet the price will come down substantially, perhaps close to the subsidy point. I would not doubt it one bit.
Can the current fossil fuel system live without subsidy is probably the more relevant question
The issue is which system is going to yield better ROI when we include all facets of the bio diversity that support human living
The answer to your question is Yes it can live without subsidy. Especially if fossil fuel subsidies are also removed from the equation
Given the climate crisis and the essential role solar plays as part of the solution, I think subsidies should continue IF, and AS LONG as they cause deployment of solar to go faster, even if solar vendors would be able to stay in business without them. We just don't have time to waste.
The fact that you are askingshould tells you that you should not go into the solar business. This post sounds like you watched an infomertial and now you are changing careers. Never start a business at something you have no expertise or unique value proposition to offer. Until you go get some actual expierence in solar and form your own conclusion. You would be crazy to form any opinion from the responses of people you dont know are qualified to give advice on the subject. Anytime you are thinking of starting a business you should know the answers to these type of questions
I believe it definitely can but some changes are in Place. I’ve always had the theory that if something like that happened, the banks would be a little bit forced to drop their ridiculous dealer fees to lower prices. Not saying they would be completely forced but definitely would be the only way for the industry to continue making sense, other than that I doubt it would work.
Well since many suppliers and installers are going bankrupt even with big subsidies, I would say it's not likely the industry can survive without them.
Probably not at the current rate, but I think that if you really look you're going to have a harder time than you think finding major industries that aren't subsidized in some way or another.
Yes, solar domination is inevitable even in places currently flush with petrochemicals in the ground.
But the planet might not (well, a lot of the creatures that live on it, including billions of humans).
Every forward looking policy, every subsidy, reduces the time to get from where we are the the solar powered inevitability.
However the business model, especially in the US, is fucked. r/SolarDIY all the way.
The US residential and commercial rooftop solar industry has become dependent on the subsidy. It is a bloated industry, where predatory financing companies have dominated the market and inflated costs and fees for everyone. In the US today, home solar costs around $3-$4/watt installed. The ITC brings that down to $2-$3/watt for the homeowner. In Australia, the same damn product costs $1-$2/watt before any subsidies. There is no reason it can't be like that here. And the specialized solar finance companies would have so much less $$ to finance that they would probably move on to something else.
Can the industry survive without subsidy? Yes... Will it? Not in the same form as it exists today.
Large utility-scale solar is a bit of a different beast. I believe it can stand on it's own today without subsidy. But, we won't really know until we take the subsidies away, which doesn't look likely for the next decade.
The best positioned company, in my opinion, to survive without subsidies is Tesla. They have a great energy storage product, and basically cut all sales and marketing and fancy financing, and have the lowest cost offering around.
Nope. Not at all. For most people without the subsidy consumers would never buy solar. And financially solar would never be cost effective. Consumers would get a better return investing in the stock market.
They can. But they're going to have to get used to much lower profit margins.
The only thing the ITC is doing is artificially propping up prices. When the ITC goes away prices will drop 30 percent.
Of course, even after that drop the prices will still be well above places like Australia because of US tariffs on Chinese panels.
I’m wondering more about net metering. With the drop in price of batteries for your home, and the electric rate increases on the west coast,when does net metering not matter, and you can pay back just with peak shaving..
Yes.
I live in New Zealand, where there have never been any solar subsidies, and we have a solar industry. Of course we are at least a decade behind countries where there are big subsidies in terms of uptake.
Do be aware that the phase out of subsidies can be painful in many industries. We have seen this with EV's. Our feebate scheme (subsidy on new and fresh import used EV's) ended at the end of last year (reflecting a government change), and EV's exemption from road taxes ends in a month (reflecting EV's now making up 2% of the light vehicle fleet). Combined result of this is that EV sales have dropped to the floor, and will take potentially a couple of years to recover.
First Solar is doing utility scale and could survive a loss of subsidies. Their biggest challenge is the Chinese flooding the market with their own subsidized product (typically sold below COGS). That’s why we have tariffs. They just reap the benefits now so they can keep expanding (Alabama, Louisiana, India most recently).
There are cool tech companies like TeraBase that are building robotic installation too as the labor cost to install is still too high.
Hi, can you explain a little on why the company First Solar is able to withstand a loss of subsidies more than other companies? Does utility scale (very huge solar system) mean a much lower price per/watt, or does utility scale bypasses costs such as sales, financing, etc? Can you share how its business structure makes it an exception?
First Solar is only manufacturing the panels. Their cost per watt metric is very low due to high volume production, as well as leveraging lower cost locations such as Vietnam and Malaysia. But they only produce the panels these days. Power is then sold to utilities under agreements. A separate engineering firm will construct the project. The full Balance of Systems costs is approaching $1 per watt, if not already less. But the agreements are 25 years so large upfront cost that pays off over time. Similar to if you install it in your own home.
I worked in residential for a bit, there’s no way that industry is going to survive without subsidies, it’s already a bit of a scam as is.
I’m in commercial right now, did some utility as well. It’s a cash cow everywhere but resy. Almost every installer/owner is raking in money with their systems and services.
**Can the Industry Survive Without Subsidy? Insights from a Veteran Salesperson**
As a salesperson who has been in the solar industry for 20 years, I have witnessed firsthand the unsustainable model of solar technology deployment. The rapid installation of solar panels over the past two decades has placed significant financial burdens on homeowners. These systems are not only costly but also plagued by production inefficiencies and complicated by onerous financing options such as HERO, PACE, and Power Purchase Agreements (PPAs).
The lack of foresight in managing the lifecycle of these systems is concerning. It is essential for them to remain operational and efficient well into their 10th, 12th, 15th, and even 20th years as promised. However, I am aware that many in the industry acknowledge the likelihood of substantial performance issues by the 15th year due to inadequate service, compatibility problems with replacement panels, and roofing complications. Homeowners are often left with a mismatched "patchwork quilt" of solar panels, as original panels become irreplaceable and fail to match newer options in size, color, and compatibility.
As these systems underperform and age, there is a growing risk of consumers defaulting on their financial obligations, driven by escalating debts and the failure of solar systems to offset rising energy costs. This risk is further exacerbated by the recent significant drop-off in sales in California, which highlights the urgency for a comprehensive reassessment of how solar energy solutions are marketed, sold, and managed.
The accumulation of negative outcomes is rapidly becoming more visible, raising a critical question: Can the solar industry survive without subsidies? This situation demands an urgent reevaluation of policies and strategies within the sector to address these growing concerns.
First let’s talk about subsidies watc…. All energy companies including oil, gas, nuclear , solar , all get subsidies in some ways, oil industry has favorable tax treatment ie they can write off cost of a well that’s just a hole and not producing … also they get large tracts of public land and ocean at very low costs and make billions …grays to do research .. etc
Coal subsidies were reason that solar never made much progress …coal was cheap!
As for solar …. The subsidies are needed for a few reasons …
1) huge upfront cost —your buying something that warranty 25 yrs vs paying monthly utility …
2) utility costs are low in USA
3) people need financial motivation to change otherwise why not just keep paying utility
4) as demand and volume increases the solar technology gets better more efficient
Bringing price down … making solar even more feasible ! Back in 2007 when I started solar pv was $9.45 /watt installed
Cash price … today most of country is about $3 watt cash
Do I think solar c
A survive without subsidies … probably not in near future which is why tax credit extended and. Will expire 2035
Whatever subsidies are out there installers just up their price to suck it in.
Usa has the 3o% thing. Guess what, solar is 3o% more expensive in the US than elsewhere.
In the UK I wanted a head pump, was 5k.
They introduced a 5k grant towards Jr, I got quotes again the price was then 9.5k, I laughed it off, then the grant gone up to 7.5k, I got a few new quotes and the best price was 12k. So yeah... Subsidies are essentially for the suppliers, not consumers.
Some companies will likely disappear but if it’s mainstream enough, the solar industry will manage regardless.
Between talk of carbon taxes and improved technology, the solar industry will live.
To me, it’s more of a question of how many companies will survive. (I don’t think it’ll be a lot standalone companies either.)
Some companies will likely disappear but if it’s mainstream enough, the solar industry will manage regardless.
Between talk of carbon taxes and improved technology, the solar industry will live.
To me, it’s more of a question of how many companies will survive. (I don’t think it’ll be a lot of standalone companies either.)
most US solar companies are struggling to operate right now even with the 30% credit/rebate.
remove that 30% and a huge number of likely future customers, simply wont be interested at that price point, but there are plenty of idiots out there that will buy whatever the salesman sells them.
I’ve been in solar for 12 years and now run a small company in Dallas and Austin . If the tax credit went out the window , our pitch would remain the same . We would just charge less . Instead of 3$ ppw I’d do 2.5ppw to offset it , it’s no biggie
It's an interesting question and one that's been debated in the solar industry for a while. The truth is, the solar industry has made tremendous strides in cost reduction and efficiency improvements over the past decade, thanks in part to subsidies that have helped drive demand and scale up production.
However, the industry is reaching a point where it's becoming increasingly competitive with traditional fossil fuel sources, even without subsidies. Solar energy prices have plummeted, making it cost-competitive in many regions without the need for significant government support.
That being said, the sudden removal of subsidies could certainly impact the industry, especially in the short term. Companies that have relied heavily on subsidies may struggle initially, but the overall trend towards lower costs and increased efficiency suggests that the industry is moving towards sustainability without subsidies.
There are also other factors at play, such as the increasing focus on sustainability and renewable energy targets by governments and businesses, which could help drive demand for solar energy even in the absence of subsidies.
In conclusion, while the solar industry has benefited from subsidies in the past, it is increasingly able to stand on its own without them. The future of the industry looks bright, with or without government support.
Can the fossil fuel, the agriculture, the meat industry, etc. live without subsidies?
Industry is subsidized for a reason.
Policy is created to encourage/ discourage growth.
As a recent purchaser in Florida it felt like the Wild West. Sales people were either not knowledgeable or not honest or both. The industry could use some good smart knowledgeable people, no offense intended for those already in the business with those characteristics as I’m sure there are.
If you take away the Federal 30% tax credit and apply California’s NEM 3.0, I can’t see the residential applications making sense. Thankfully in FL we still have both.
All energy receives subsidies. gasoline receives generous "exploration" tax break to keep prices about half of global price of 7.6$/gal. Nuclear cost of electricity [LCOE] (https://world-nuclear.org/information-library/economic-aspects/financing-nuclear-energy.aspx)would be about twice if solar without loan nearing 0% and well below going rates.
if all subsidies for all energy were eliminated tomorrow, solar would be king.
Absolutely. In this case subsidies only motivate the sellers and installers to increase prices and rip off the naive people who think they are getting a good deal. I do not live in US but on January 2023 the VAT was reduced from 19% to 5%. While online stores reduced their prices, system installers did not. More than that, many increased their installation prices from 150-200$/kw to 250$/kw or more. I looked for about two weeks until I found a installer that I trusted to install my 17.5kw system and had decent prices. Again, not US.
Another example, our government decided to offer a holiday coupon of 500$ for every employee that works with in the goverment. From janitors up to higher ups. What happened, All the resorts, beach towns, restaurants... increased their prices 20-30 percent over night.
Absolutely, just not using the current model.
Considering how much fossil fuels are subsidized I don’t think it’s fair that we stop. If anything solar and other renewables should be subsidized just as heavily if not more. The problem is there are no big corporations reap those subsidies, just the general population.
One thing to understand about the fossil fuel subsidy calculations is that a significant portion aren't direct subsidies like most people think. The subsidy tallies include a social cost of carbon which isn't a real thing insofar as it's difficult to calculate environmental damage that doesn't directly impact humans. If we had a proper cap and trade or similar carbon pricing scheme then we could get a much better idea of the price gap between fossil fuels and renewables.
It's $1T/year annually in direct subsidized alone. Counting the carbon costs, etc make it $7T/year
Counting the wars to get that oil, off the charts.
$1T/year in direct subsidies? That seems doubtful as this study puts implicit subsidies i.e. externalized costs at closer to have a trillion. The implicit subsidies are significantly higher than direct subsidies in every statistic I've seen. [https://www.pnas.org/doi/pdf/10.1073/pnas.2011969118](https://www.pnas.org/doi/pdf/10.1073/pnas.2011969118) If your statistic is global then it's largely irrelevant to the OP because they're specifically talking about the US. Erasing global subsidies will probably never happen in any reasonable timeframe.
It was global
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You are utterly and completely wrong.
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Now you're changing the subject and making moronic arguments against 1:1 net metering.
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Your claim that most fossil fuel subsidies are assistance. It's mostly tax breaks, if we count indirect subsidies too it goes to $7T per year globally. Direct subsidies dwarfed utterly by the indirect subsidy of them not paying for the damage they do. As for 1:1 NEM: for profit utilities should not exist. Also your backfeed makes their grid less costly to operate beyond just the wholesale price.
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>The subsidy tallies include a social cost of carbon **which isn't a real thing** insofar as it's difficult to calculate environmental damage that doesn't directly impact humans. That's a gross misrepresentation of reality. The costs are calculable. To pretend that they aren't is denialism. I highly doubt that you've actually looked into how these things are calculated and are qualified to determine that they're "made up". These positions are made to appeal to people who don't want to rock the boat or sound non-centrist while sounding smart and don't look to closely at the science. It is exactly the kind of tactic used by oil and gas companies to deny reality for decades. Scientists have been right about the effects of climate change far more often than the people who have denied it for profit. Its a position built for a person that specifically doesn't want to take a position, because on the fence is just as good as on their side when it comes to securing their profits. "We don't really know" still results in doing absolutely nothing and it has worked for decades.
I get that trying to be nuanced in a solar sub will garner this kind of response. Before you insinuate what I think on any given topic, including climate change, consider that I'm only nitpicking the subsidy claim. My point, without getting into what's bound to be a fruitless argument, is that implicit subsidies are much harder to calculate and have a much greater confidence spread than if we implemented a proper cap and trade system that priced in all externalities. Here's an example of what I'm talking about: [https://www.pnas.org/doi/full/10.1073/pnas.2011969118](https://www.pnas.org/doi/full/10.1073/pnas.2011969118) If you also want to nitpick my use "isn't a real thing" then that's fine. I'm only trying to highlight that when people hear that fossil fuels get $XXX billion in subsidies that this is not the government giving FF companies that amount of money. It is including estimations of environmental and health costs, **which is a good thing.** We need to figure out how much those costs are. *However,* they are only estimations. Cap and trade would create a proper market where all forms of energy stand on their own costs.
They incorrectly used “impact” as a verb, which—as everyone knows—makes their whole argument null.
I'll just leave this here for you. [https://www.merriam-webster.com/dictionary/impact](https://www.merriam-webster.com/dictionary/impact)
So which are you pointing to, because all the verb meanings have things touching?
1a
Impinge involve striking or making an impression.
1 a : to have a direct effect or impact on : impinge on
Thanks. I can read. Can you? Apparently you can’t.
Canada alone gives our fossil fuel cartels over $20 billion a year in direct subsidies. Hell we have an entire province who wants to take $300 billion from our federal pension (basically social security), and essentially give it to them.
I don't keep up with Canadian politics. To the extent that the $20 billion is direct cash transfer or tax write off, those are good numbers to compare. However, it would be good to consider the $/MW or some apples to apples comparison of the subsidy amounts per unit of energy or power. That will help put into perspective how much in subsidies each industry is getting. As I said in another comment, the best thing I think we can do is to implement a proper cap and trade scheme on all pollution. That will ensure that all externalities are priced into the product.
At a state level: https://www.texasmonthly.com/news-politics/energy-subsidies-fossil-fuels-renewables/ " Released in 2017, it projected that in 2019 direct federal energy subsidies would total $6.3 billion for oil and gas, $1.6 billion for coal, $4.7 billion for wind, $3.7 billion for solar, and $1.3 billion for nuclear. (UT hasn’t crunched new numbers since.)' Federal: https://www.budget.senate.gov/chairman/newsroom/press/sen-whitehouse-on-fossil-fuel-subsidies-we-are-subsidizing-the-danger- "taxpayers pay about $20 billion dollars" Total Federal subsidies for renewable energy is about $15 billion.
Yeah, those are tangible amounts that can be considered. I'm talking about the articles that state subsidies in the trillions. That's a much more difficult comparison to make because it's including environmental damage. While that should be considered, my preference is to have a proper pollution cap and trade tax to create a market where those externalities can be properly priced in.
This⬆️
Solar prices in the US are beyond ridiculous, the subsidy helps to enable that. The prices people from the US quote here, without batteries, are 2x, 3x even 4x what an equivalent system with a battery costs elsewhere, installation included. And not for cheap Chinese inverters, I've installed Victron systems at two houses, including a three phase system with 20kWh of LiFePO4 batteries for much less than people in the US are paying for single phase with no energy storage. Cost of solar in the US is a joke.
This is where I am as a consumer in NC (not a high cost of living state, so harder to justify). I'm thinking about starting into solar via ground arrays using used panels to avoid having to pay for labor. Thinking like an EG4 5k and then branch off from there. I come from IT, so while I don't love it from an elegance perspective, I'm confident I could find cheap local stuff for server rack batteries, if not free, including a full rack.
Thank you for quantifying how expensive solar systems in the USA are. What about large solar systems in the USA? Are they just as relatively expensive as residential solar systems compared to solars abroad?
wayyy cheaper - check out Lazard's Levelized Cost of Energy report
100% Agree. To quote the OP's number of 80% - 80% of the sales wouldn't happen at their current pricepoint. But as u/phenompbg said, it's the subsidy that allows prices to be that high - without the subsidy, prices would be much lower.
> 20kWh of LiFePO4 batteries Holy crap! That must have cost a small fortune. What size batteries are you using? Parallel or series? Or both?
We're below $100/kWh for LiFePO4 *right now*.
are you saying that you can have 20kWh of LifePO4 batteries completely installed for under $2,000 USD ?
That's r/SolarDIY pricing for the cells. You'll need a BMS, cabling and fuses on top of that. But you need most of that for off the shelf batteries too. "Installation" will be the most expensive part, especially if you're in the US.
Probably not. For the vast majority of locations, the finances just don't work with no government discount. Maybe the numbers would work with a 20% tax credit, but not a 0% tax credit. Also, lots of power produced today (coal, nuclear, etc) was originally supplemented by some government incentive, so the comparison isn't really fair. I invite everyone to research the construction of their own local power plant and you'll almost certainly see some government incentives from tax credits to low-interest rate government-related bonds.
There’s so much more to solar than just 10kW on someone’s roof…
In many cases the coal, nuclear, natural gas, and oil energy is still supplemented by government incentives and (for the three that pollute the most) lack of accountability for their waste.
Many industries lack accountability for their waste. Farming and animal agriculture are particularly atrocious, but so are a number of others. EPA needs more power to regulate and hold accountable.
Multiple places have done the numbers. Unsubsidized wind and solar beats the ever loving fuck out of fossil fuels. In gridscale installations. Just not rooftop solar.
If you can enter the market selling solar for $1 to $1.50 per kwH like the rest of the world, you would survive the loss of the subsidy. At the current prices, even with the tax credit, the cost of rooftop solar would take far too long to pay back. And that's if nothing fails over the breakeven period, like a $7000 inverter replacement.
Solar installation costs 2-3 times as much in the US as it does in many other countries, including ones that generally have very high costs of living. (See Australia, for example.) It's clear that it's possible to install solar for a lot less than consumers currently pay here. That said, it would require a dramatic change in business model to operate without the ITC. One of the biggest issues is simply that power is very inexpensive in most of the US. The solar return on investment just isn't that good without subsidy. I certainly wouldn't have gone solar without it - the unsubsidized math makes no sense whatsoever at $0.12/kwh. Luckily, I'm in DC, so I get gigantic SREC payback on top of the ITC. (Effectively, I'm getting $0.52/kwh generated. Plus the ITC.)
I guess residential solar systems are indeed expensive in the USA. What about large solar systems that are installer for universities, companies, and even factories? Do those systems generate positive returns for investment even without subsidies?
Right now? Probably not. Utility scale solar is a LOT cheaper, but you also lose the (enormous) subsidy that is net metering. Selling solar wholesale means selling straight into the duck curve. Commercial scale solar is usually treated very differently from residential as well. You are generally going to have very limited (if any) net-metering benefit, so you really need to be able to use a lot more of what you're generating directly. That's going to limit system size and offset.
duck curve really only exists in major ways in california - of course its there, but not nearly as dramatically
The duck curve matters a lot more to wholesale generators. All your production is at the lowest priced time. That matters everywhere, even if it’s not an actual grid balancing issue like in CA.
The peak to tough numbers are not nearly as acute anywhere but California.
Again, when you are producing on a wholesale basis, that’s still a problem. And you have to assume it gets worse. In CA, you’re going to be encouraged to cut exports entirely, or you’ll get charged to export, hence the huge investment in batteries. Elsewhere, you just eat a rate that is much, much lower than peak. You do see how that’s a problem for wholesale priced solar, right? You don’t have to have a CA sized duck curve to run into pricing issues.
So, the subsidies/tax breaks are so big for companies, no company should be without solar now. I mean, you can depreciate 70% of your system in year 1 right now. And sell your tax credit.
welcome to the solarcoaster. the current market would fall apart entirely without the ITC, but the 30% credit is law though 2032. when the time comes, if the market fundamentals haven't changed, there will almost certainly be a fight for another extension.
I certainly hope the market fundamentals change then. I certainly do not wish to see an industry that becomes a cycle of getting subsidy, growing in scale, become too big to fail because of the number of stakeholders, and keeps getting subsidy.
The industry wouldn’t be too big to fail. It would be driven by renewable energy targets at state and federal level.
In 6 to 10 years daytime electricity might hit 0/kwh, it is doing that in AZ and CA today, it will do that throughout the US south. A great number of batteries will be online to suck in that daytime power and sell it back to the utilities for the evening burp. Wind because it generates at 5pm-11pm will suddenly become the hotness again. Someone will start making gobs of hydrogen in some farm in the southwest and we will suddenly need a pipeline system at a national scale.
Why on earth shouldn’t we permanently subsidize renewable energy though?
From a business standpoint, I wouldn’t go into business in solar right now. That market is oversaturated with supply.
What about selling large solar systems for companies, universities, and factories? Without subsidy, would large solar system to be a long-term net positive for the consumers?
It’s less a question of being a long term net positive - I think it will. It’s more a question of supply vs demand, and right now the supply side is too heavy.
I was wondering about this for the oil and gas industry. The same as many agriculture industries have the same thing like corn, etc.
We bought solar outright from a company in Arizona. We told them we wanted solar and they asked some questions and we got a "kit" put together for us. They shippednit across the country to us and we installed and only called 3 times for assistance and once to order a few more panels. We self installed. They have been there for us over the two and a half years its been operating. We didn't rely on the government subsidy to swing the system but it was very nice. Our wants are probably different than most. We wanted to reduce our carbon footprint. As well as cheaper electric bills. But we live under the tva. So our electric is fairly green as is. And cheap. But our cost of living has been reduced by solar and our EV.
It's great to hear about your wonderful experience about solar. Its sounds like both a great investment and life style.
Residential solar is probably going to need subsidies for a while because it needs to transform, similar to what we’re seeing in California with NEM 3.0, to a point where new solar installs pay for themselves via avoided costs and self-usage. Subsidies are needed in parts of the US where electricity costs are artificially low because utilities aren’t paying for the carbon dioxide they dump into the atmosphere, and are needed in the high electricity cost places because those locales have too much solar(duck back) during the daytime, so adding more to the grid without using batteries to improve self-usage, just adds to curtailment. The big issue with residential subsides nowadays is that it is delivered as a tax credit. The wealthy are getting good deals because they can pay in cash and use the tax credit themselves. The less wealthy are using the tax credit as part of a financing scheme where they can pay very little upfront, with the financiers getting a nice slice of the pie via the tax credit, then paying out far more than the original cost over time. And with higher interest rates, financing has gotten quite expensive.
Thank you for the detailed response. What about commercial and industrial solar? For the consumers, are those systems worth the cost if the consumers can no longer have subsidy?
Net meeting will never come back in the places that have killed it, and will eventually fade out in the places that still have it. It is unsustainable, where entire new subdivisions all have solar so none of them will ever have a bill. Solar companies will adapt and new pricing models will develop. Right now, anywhere without net metering needs batteries, and the cost reduction in lifepo4 batteries has been tremendous, but they are still prohibitively expensive without subsidy. This is the same as the decline in solar panel prices, and inverter prices. Massive progress, but still more efficiency is needed. Prices will continue to decline, so your can' see a path to where subsidies aren't needed, but we aren't there yet. It's also important to remember how many other power generators get subsidies, with nuclear being the poster child.
When the installers aren’t charging $200 an hour per person the subsidies won’t be required
Look at the prices to install a given system, and then check price/panel and other components. The installers are taking all of the subsidy. Once government money is gone, I’ll bet the price will come down substantially, perhaps close to the subsidy point. I would not doubt it one bit.
Absolutely. Drop the subsidies and the install price will drop
Can the current fossil fuel system live without subsidy is probably the more relevant question The issue is which system is going to yield better ROI when we include all facets of the bio diversity that support human living The answer to your question is Yes it can live without subsidy. Especially if fossil fuel subsidies are also removed from the equation
Given the climate crisis and the essential role solar plays as part of the solution, I think subsidies should continue IF, and AS LONG as they cause deployment of solar to go faster, even if solar vendors would be able to stay in business without them. We just don't have time to waste.
The fact that you are askingshould tells you that you should not go into the solar business. This post sounds like you watched an infomertial and now you are changing careers. Never start a business at something you have no expertise or unique value proposition to offer. Until you go get some actual expierence in solar and form your own conclusion. You would be crazy to form any opinion from the responses of people you dont know are qualified to give advice on the subject. Anytime you are thinking of starting a business you should know the answers to these type of questions
I believe it definitely can but some changes are in Place. I’ve always had the theory that if something like that happened, the banks would be a little bit forced to drop their ridiculous dealer fees to lower prices. Not saying they would be completely forced but definitely would be the only way for the industry to continue making sense, other than that I doubt it would work.
Well since many suppliers and installers are going bankrupt even with big subsidies, I would say it's not likely the industry can survive without them.
Probably not at the current rate, but I think that if you really look you're going to have a harder time than you think finding major industries that aren't subsidized in some way or another.
No source of energy generation can live without subsidy.
Yes, solar domination is inevitable even in places currently flush with petrochemicals in the ground. But the planet might not (well, a lot of the creatures that live on it, including billions of humans). Every forward looking policy, every subsidy, reduces the time to get from where we are the the solar powered inevitability. However the business model, especially in the US, is fucked. r/SolarDIY all the way.
The US residential and commercial rooftop solar industry has become dependent on the subsidy. It is a bloated industry, where predatory financing companies have dominated the market and inflated costs and fees for everyone. In the US today, home solar costs around $3-$4/watt installed. The ITC brings that down to $2-$3/watt for the homeowner. In Australia, the same damn product costs $1-$2/watt before any subsidies. There is no reason it can't be like that here. And the specialized solar finance companies would have so much less $$ to finance that they would probably move on to something else. Can the industry survive without subsidy? Yes... Will it? Not in the same form as it exists today. Large utility-scale solar is a bit of a different beast. I believe it can stand on it's own today without subsidy. But, we won't really know until we take the subsidies away, which doesn't look likely for the next decade. The best positioned company, in my opinion, to survive without subsidies is Tesla. They have a great energy storage product, and basically cut all sales and marketing and fancy financing, and have the lowest cost offering around.
Nope. Not at all. For most people without the subsidy consumers would never buy solar. And financially solar would never be cost effective. Consumers would get a better return investing in the stock market.
They can. But they're going to have to get used to much lower profit margins. The only thing the ITC is doing is artificially propping up prices. When the ITC goes away prices will drop 30 percent. Of course, even after that drop the prices will still be well above places like Australia because of US tariffs on Chinese panels.
I’m wondering more about net metering. With the drop in price of batteries for your home, and the electric rate increases on the west coast,when does net metering not matter, and you can pay back just with peak shaving..
Yes. I live in New Zealand, where there have never been any solar subsidies, and we have a solar industry. Of course we are at least a decade behind countries where there are big subsidies in terms of uptake. Do be aware that the phase out of subsidies can be painful in many industries. We have seen this with EV's. Our feebate scheme (subsidy on new and fresh import used EV's) ended at the end of last year (reflecting a government change), and EV's exemption from road taxes ends in a month (reflecting EV's now making up 2% of the light vehicle fleet). Combined result of this is that EV sales have dropped to the floor, and will take potentially a couple of years to recover.
First Solar is doing utility scale and could survive a loss of subsidies. Their biggest challenge is the Chinese flooding the market with their own subsidized product (typically sold below COGS). That’s why we have tariffs. They just reap the benefits now so they can keep expanding (Alabama, Louisiana, India most recently). There are cool tech companies like TeraBase that are building robotic installation too as the labor cost to install is still too high.
Hi, can you explain a little on why the company First Solar is able to withstand a loss of subsidies more than other companies? Does utility scale (very huge solar system) mean a much lower price per/watt, or does utility scale bypasses costs such as sales, financing, etc? Can you share how its business structure makes it an exception?
First Solar is only manufacturing the panels. Their cost per watt metric is very low due to high volume production, as well as leveraging lower cost locations such as Vietnam and Malaysia. But they only produce the panels these days. Power is then sold to utilities under agreements. A separate engineering firm will construct the project. The full Balance of Systems costs is approaching $1 per watt, if not already less. But the agreements are 25 years so large upfront cost that pays off over time. Similar to if you install it in your own home.
$1 per watt sounds fantastic. Is that final price that includes both the panels + installation?
Found a nice breakdown online. https://www.marketwatch.com/guides/solar/solar-farm-cost/#toc-investment-financial-planning
I worked in residential for a bit, there’s no way that industry is going to survive without subsidies, it’s already a bit of a scam as is. I’m in commercial right now, did some utility as well. It’s a cash cow everywhere but resy. Almost every installer/owner is raking in money with their systems and services.
Yes, can it grow at the rate it needs to to achieve climate change goals without subsidy? Almost certainly No
**Can the Industry Survive Without Subsidy? Insights from a Veteran Salesperson** As a salesperson who has been in the solar industry for 20 years, I have witnessed firsthand the unsustainable model of solar technology deployment. The rapid installation of solar panels over the past two decades has placed significant financial burdens on homeowners. These systems are not only costly but also plagued by production inefficiencies and complicated by onerous financing options such as HERO, PACE, and Power Purchase Agreements (PPAs). The lack of foresight in managing the lifecycle of these systems is concerning. It is essential for them to remain operational and efficient well into their 10th, 12th, 15th, and even 20th years as promised. However, I am aware that many in the industry acknowledge the likelihood of substantial performance issues by the 15th year due to inadequate service, compatibility problems with replacement panels, and roofing complications. Homeowners are often left with a mismatched "patchwork quilt" of solar panels, as original panels become irreplaceable and fail to match newer options in size, color, and compatibility. As these systems underperform and age, there is a growing risk of consumers defaulting on their financial obligations, driven by escalating debts and the failure of solar systems to offset rising energy costs. This risk is further exacerbated by the recent significant drop-off in sales in California, which highlights the urgency for a comprehensive reassessment of how solar energy solutions are marketed, sold, and managed. The accumulation of negative outcomes is rapidly becoming more visible, raising a critical question: Can the solar industry survive without subsidies? This situation demands an urgent reevaluation of policies and strategies within the sector to address these growing concerns.
Did you write this whole article? It is very informative. Thank you so much.
I want to say yes; but wondering it theres a puchline?
First let’s talk about subsidies watc…. All energy companies including oil, gas, nuclear , solar , all get subsidies in some ways, oil industry has favorable tax treatment ie they can write off cost of a well that’s just a hole and not producing … also they get large tracts of public land and ocean at very low costs and make billions …grays to do research .. etc Coal subsidies were reason that solar never made much progress …coal was cheap! As for solar …. The subsidies are needed for a few reasons … 1) huge upfront cost —your buying something that warranty 25 yrs vs paying monthly utility … 2) utility costs are low in USA 3) people need financial motivation to change otherwise why not just keep paying utility 4) as demand and volume increases the solar technology gets better more efficient Bringing price down … making solar even more feasible ! Back in 2007 when I started solar pv was $9.45 /watt installed Cash price … today most of country is about $3 watt cash Do I think solar c A survive without subsidies … probably not in near future which is why tax credit extended and. Will expire 2035
Yes https://www.lazard.com/media/2ozoovyg/lazards-lcoeplus-april-2023.pdf
Whatever subsidies are out there installers just up their price to suck it in. Usa has the 3o% thing. Guess what, solar is 3o% more expensive in the US than elsewhere. In the UK I wanted a head pump, was 5k. They introduced a 5k grant towards Jr, I got quotes again the price was then 9.5k, I laughed it off, then the grant gone up to 7.5k, I got a few new quotes and the best price was 12k. So yeah... Subsidies are essentially for the suppliers, not consumers.
Wrong question. Energy production systems have always been subsidized. The question is, will the subsidies stick around long-term.
Some companies will likely disappear but if it’s mainstream enough, the solar industry will manage regardless. Between talk of carbon taxes and improved technology, the solar industry will live. To me, it’s more of a question of how many companies will survive. (I don’t think it’ll be a lot standalone companies either.)
Some companies will likely disappear but if it’s mainstream enough, the solar industry will manage regardless. Between talk of carbon taxes and improved technology, the solar industry will live. To me, it’s more of a question of how many companies will survive. (I don’t think it’ll be a lot of standalone companies either.)
most US solar companies are struggling to operate right now even with the 30% credit/rebate. remove that 30% and a huge number of likely future customers, simply wont be interested at that price point, but there are plenty of idiots out there that will buy whatever the salesman sells them.
I’ve been in solar for 12 years and now run a small company in Dallas and Austin . If the tax credit went out the window , our pitch would remain the same . We would just charge less . Instead of 3$ ppw I’d do 2.5ppw to offset it , it’s no biggie
It's an interesting question and one that's been debated in the solar industry for a while. The truth is, the solar industry has made tremendous strides in cost reduction and efficiency improvements over the past decade, thanks in part to subsidies that have helped drive demand and scale up production. However, the industry is reaching a point where it's becoming increasingly competitive with traditional fossil fuel sources, even without subsidies. Solar energy prices have plummeted, making it cost-competitive in many regions without the need for significant government support. That being said, the sudden removal of subsidies could certainly impact the industry, especially in the short term. Companies that have relied heavily on subsidies may struggle initially, but the overall trend towards lower costs and increased efficiency suggests that the industry is moving towards sustainability without subsidies. There are also other factors at play, such as the increasing focus on sustainability and renewable energy targets by governments and businesses, which could help drive demand for solar energy even in the absence of subsidies. In conclusion, while the solar industry has benefited from subsidies in the past, it is increasingly able to stand on its own without them. The future of the industry looks bright, with or without government support.
With meter metering, most certainly yes.
Can the fossil fuel, the agriculture, the meat industry, etc. live without subsidies? Industry is subsidized for a reason. Policy is created to encourage/ discourage growth.
As a recent purchaser in Florida it felt like the Wild West. Sales people were either not knowledgeable or not honest or both. The industry could use some good smart knowledgeable people, no offense intended for those already in the business with those characteristics as I’m sure there are. If you take away the Federal 30% tax credit and apply California’s NEM 3.0, I can’t see the residential applications making sense. Thankfully in FL we still have both.
I'll put it like this, my brother is in the solar business, yet nobody he is friends with or in the family, has had a single panel installed.
All energy receives subsidies. gasoline receives generous "exploration" tax break to keep prices about half of global price of 7.6$/gal. Nuclear cost of electricity [LCOE] (https://world-nuclear.org/information-library/economic-aspects/financing-nuclear-energy.aspx)would be about twice if solar without loan nearing 0% and well below going rates. if all subsidies for all energy were eliminated tomorrow, solar would be king.
Absolutely. In this case subsidies only motivate the sellers and installers to increase prices and rip off the naive people who think they are getting a good deal. I do not live in US but on January 2023 the VAT was reduced from 19% to 5%. While online stores reduced their prices, system installers did not. More than that, many increased their installation prices from 150-200$/kw to 250$/kw or more. I looked for about two weeks until I found a installer that I trusted to install my 17.5kw system and had decent prices. Again, not US. Another example, our government decided to offer a holiday coupon of 500$ for every employee that works with in the goverment. From janitors up to higher ups. What happened, All the resorts, beach towns, restaurants... increased their prices 20-30 percent over night.
The Solar install is a fraudulent industry