11–20 of 332 posts
Good piece...putting on my econ hat here, it would definitely be more accurate to say that prices are signals that reflect the all-in cost of moving products and their dependencies through a supply chain and to the consumer. These signals can be disrupted by many factors, including competition or lack thereof, regulation or tax policy, etc, that often can make things inefficient. But in the examples the author uses,…
OP hints at this - but the problem seems to be net metering lumps capacity payments in with the cost of power. Some markets run a separate capacity market that rewards power generators explicitly for their capacity - independently of whether they actually generate any electricity. (California's market (CAISO) doesn't do this) A long time ago I was involved in setting capacity market prices if y'all have follow up que…
>> For instance, pricey CDs prevented lots of people from listening to music. Nope. Nobody I knew in the 90s had this issue. In fact, higher prices caused more people to listen to more music. Unable to afford CDs, the kids turned to Napster. After that they had access to more music than any generation in history. This in turn forced the music industry to change, to create online delivery platforms. Napster might be g…
There must have been a lot of people that had access to record stores but not to the internet, and not enough money for lots of CDs. And Napster launched in 1999.
>> For instance, pricey CDs prevented lots of people from listening to music. Nope. Nobody I knew in the 90s had this issue. In fact, higher prices caused more people to listen to more music. Unable to afford CDs, the kids turned to Napster. After that they had access to more music than any generation in history. This in turn forced the music industry to change, to create online delivery platforms. Napster might be g…
But this doesn't make prices "lies".
> The current net metering system in California is pretty favorable to customers with rooftop solar; in effect, it’s a subsidy.
It's quite an overt and deliberate subsidy to foster solar power technology (which has been wildly successful), reduce demand on the grid and to shift the pattern of power usage. Electricity use spikes during daylight hours [1]. This happens to be when the Sun is shining and solar power works. Peak demand is really the only thing that matters in powering a grid. Solar is highly effective at reducing peak usage.
I honestly don't know why the author feels like any of this isn't "upfront".
If some states weren't captured by utility monopolies, then solar users would be legally allowed to disconnect from the power grid, potentially solving the first issue. It's amazing to me that this is illegal anywhere.
[1]: https://off-grid-home.com/is-it-legal-to-disconnect-your-hom...
If some states weren't captured by utility monopolies, then solar users would be legally allowed to disconnect from the power grid, potentially solving the first issue. It's amazing to me that this is illegal anywhere.
The author here would do well to and understand and use terms like "fixed costs" and "variable costs". There are large fixed costs in the power grid and the author is complaining that the retail price of electricity doesn't reflect the variable costs, leading to distortions and perverse incentives. But this doesn't make prices "lies". > The current net metering system in California is pretty favorable to customers wi…
I'd say that the issue the author is addressing is that it is not so overt. Sure, if you meditate on it it becomes clear it's a subsidy, but I think the vast majority of the people who take advantage of it simply think "I produce as much as a use, so of course my bill should be zero."
“In practice, it’s often politically difficult to argue for overt subsidies, and we resort to workarounds like net metering.“ The reason we have so many hidden subsidies (also: tax credits) is precisely the sentence above. It’s the difference between policy and politics. Few policies are designed well because the main force driving their creation is political support (or the lack of it).