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Requiem for a Solar Plant

7goldfish.com

101–110 of 119 posts

Re: Requiem for a Solar Plant

#101

I am always wondering why the US scores so well on these "ease of doing business" rankings??? Even taking into account that this was a risky business idea, relying on subsidies etc., both property and interconnection to me seem like areas where the legislation could be clear and predictable. Adding in the ever-present risk of litigation in the US, I wonder if my stock portfolio is maybe a bit too reliant on this mark…

Well, let me tell you (from some experience) how this would have gone in good old Germany:

No mineral rights like Texas, except for the occasional lignite open-pit mining, but that is very limited to certain regions. And even then, you'd be reimbursed handsomely for your troubles and the torn down equipment and land.

Grid connection would have been easier, because the electricity company is required to provide timely and cheap connections to the next sufficient connection point. However, there are exceptions, if they can prove that they cannot get contractors, so you have to wait some time, usually two to three years after you sign the contract for the connection.

Before connection contract signing, you need to enter an auction for the price of the power you will be providing. Fixed for 20 years. However, those 20 years start at signature, so the first 2 to 3 are wasted because of no connection. And you are competing with tons of other solar installations, so you can't really predict your profits when planning. Btw. they can even fail to connect you after you already built your plant for the same reason, so you may either wait or risk it...

Then you have to get approval from the local planning bureau. For that you need a number of assessments: You need to prove that there is no environmental impact, e.g. on rare species of vermin and weeds, no impact on nearby population e.g. through noise, reflection, or other annoyances. Then you have to get approval for the land-use change, because usually you are building on land zoned agrarian use, that has to be changed (and usually can never be changed back, so the land is worthless afterwards even if you don't actually build). You have to get approval from various environmental protection agencies that certify you are not in any kind of protected zone, or if you are (half of Germany is), then you are not affecting anything important (which is a 50/50 chance). Then your plans have to be submitted for public review, where local groups of busybodies, can enter their objections. If there are objections, the approval can be delayed or denied. You can of course "bribe" the public with a few well-placed donations to local groups, or by declaring your enterprise to be open to local investment for which you then sell shares and hand our corresponding parts of your profits. This of course necessitates a change in legal form, which of course needs another few rounds with lawyers, tax advisors, the tax office and a whole lot of due diligence because you are now handing out shares to small investors, which is kind of protected and therefore complicated...

Believe me, the OP's story is very harmless compared to what this would take here, even though the above is the simplified process after a few rounds of laws that were intended to accelerate building green energy.

P.S.: You need a fence and cameras. First because no insurance will allow it without the fence, some idiot kid could climb a panel and fall. Second because there are professional solar panel thieves around here, stealing them at night by the truckload.

Re: Requiem for a Solar Plant

#102

Zero sympathy from this quarter - what started as a tax dodge to, let's face it, defund schools, hospitals and social security, ended up as a "poor me" self-effacing blog post.

tax incentives to create solar infrastructure are designed to create solar infrastructure, I don't understand why it's being described as a pejorative "tax dodge" when the government directs funds this way rather than takes the money directly and buys those things.

I guess tax incentives feel strange because it feels a bit like a thing the government needs to do because of bad behaviors.

As you say, the situation would be 100% identical if the government was receiving directly the tax and then buying these things directly. So why don't they do that? Because people with money will find ways to dodge taxes anyway. Tax incentives is basically admitting that people with money are selfish and cheaters, and that we need to "play their game" to achieve what they should normally and ethically do if they were not detrimental to society.

Interestingly enough, if the person would have paid their taxes normally and that this money would have been used for a government project, then the probability of success would have been higher (I know some government projects are really mismanaged, but so was this one anyway), because the government would have been in better position to 1) get experts opinions/supports, 2) understand the rules and regulations, 3) synchronize different projects for a better complementarity.

Re: Requiem for a Solar Plant

#103

I am always wondering why the US scores so well on these "ease of doing business" rankings??? Even taking into account that this was a risky business idea, relying on subsidies etc., both property and interconnection to me seem like areas where the legislation could be clear and predictable. Adding in the ever-present risk of litigation in the US, I wonder if my stock portfolio is maybe a bit too reliant on this mark…

I think the issue with doing business in the US is that theres technically a way to do anything you want. But if you mess up, choose the wrong state or area its ripped away.

I have been heavily downvoted for it before, but the US is one of the worst places to do business. Culture is the primary issue, but even beyond that its a legal nightmare.

Oh and infrastructure sucks. The culture and management of critical infrastructure is so horrific that if you have any experience dealing with intelligent practitioners you will bounce off the yanks extremely quickly.

Re: Requiem for a Solar Plant

#104

Every time I learn something new about Texas, I like Texas less. At least Dr Pepper comes from Texas. There’s that to like. Everything else just always seems upside down absurd.

I'm curious what part of this you thought was an indictment on Texas. ERCOT has the most generator-friendly interconnection process in the nation and leads the country in both renewable generation and utility-scale solar installations. Mineral rights are dominant over surface rights in most jurisdictions, including other states like California. To call it "insane" just shows how little experience Mr. R has in land de…

Not arguing against your overall point, but Texas is a well-known lesson in failed power grid management, market design, and policy - which in combination is the driving force behind the current economic energy opportunities.

I say this as someone in the energy industry who operates many renewable assets across the U.S., some in Texas, and participates in the markets. Texas is a power nightmare, worst in the country. Everyone in Texas is investing in desperate immediate need and toa lesser degree, future potential, but that potential isn’t here yet and the cost of wholesale power spikes to egregious levels regularly.

Re: Requiem for a Solar Plant

#105

Every time I learn something new about Texas, I like Texas less. At least Dr Pepper comes from Texas. There’s that to like. Everything else just always seems upside down absurd.

I'm curious what part of this you thought was an indictment on Texas. ERCOT has the most generator-friendly interconnection process in the nation and leads the country in both renewable generation and utility-scale solar installations. Mineral rights are dominant over surface rights in most jurisdictions, including other states like California. To call it "insane" just shows how little experience Mr. R has in land de…

> Mineral rights are dominant over surface rights in most jurisdictions, including other states like California. To call it "insane" just shows how little experience Mr. R has in land development.

The insane part is the management of mineral rights, shattering into a thousand untracked shards and too ruinous to insure against without waivers. Not the existence of them.

> The area OP is trying to develop in is a QOZ for a reason; he should have expected there to be upgrades necessary to delivery that level of power to a substation in an area where nothing else is going on.

The biggest problem was that it still needed a ton of limitation even with upgrades.

Re: Requiem for a Solar Plant

#106
post #102

Earlier quoted context omitted.

tax incentives to create solar infrastructure are designed to create solar infrastructure, I don't understand why it's being described as a pejorative "tax dodge" when the government directs funds this way rather than takes the money directly and buys those things.

I guess tax incentives feel strange because it feels a bit like a thing the government needs to do because of bad behaviors. As you say, the situation would be 100% identical if the government was receiving directly the tax and then buying these things directly. So why don't they do that? Because people with money will find ways to dodge taxes anyway. Tax incentives is basically admitting that people with money are s…

I don’t think it’s because anyone has resigned themselves to thinking all rich people are cheaters who will win. I think we use tax incentives in the US primarily because of two beliefs - the first that the private market is often more efficient than public purchasing (which has a pretty poor showing from this article, as you point out!), and the other is that people can choose how to contribute some of their obligations back to society from the set of taxable deductions. We want to softly encourage some behaviors and discourage others, and adjusting taxes work well as a lower risk lower force way to do that.

Re: Requiem for a Solar Plant

#107

Earlier quoted context omitted.

I'm curious what part of this you thought was an indictment on Texas. ERCOT has the most generator-friendly interconnection process in the nation and leads the country in both renewable generation and utility-scale solar installations. Mineral rights are dominant over surface rights in most jurisdictions, including other states like California. To call it "insane" just shows how little experience Mr. R has in land de…

Not arguing against your overall point, but Texas is a well-known lesson in failed power grid management, market design, and policy - which in combination is the driving force behind the current economic energy opportunities. I say this as someone in the energy industry who operates many renewable assets across the U.S., some in Texas, and participates in the markets. Texas is a power nightmare, worst in the country.…

I’m not even sure what your last sentence means (you got caught on the wrong side of a PPA during the winter storm I assume?).

I’ve been a market participant in every American ISO for over a decade and have helped build both thermal and renewable generation. I couldn’t disagree more and the numbers don’t back up your story.

Re: Requiem for a Solar Plant

#108
Reading this right after watching "Mountainhead" was enjoyable, but I do commend the guy for publishing it; sadly few case studies where things went wrong ever see the light of day. This part stood out:

>"What's the tax treatment on crypto profits if I roll them into a Qualified Opportunity Zone investment?" I'd asked my accountant. His eyes had lit up—the first clue I was onto something interesting.

If you find yourself in the position of giving tax advice to your accountant, he's either a crummy accountant or playing you to get more fees. And it looks like the most rosy estimate was -$1.5m NPV to gain ~$1.1m ($8.7m x 0.32 x 0.4) in tax benefits? I can't see what the plan was.

> Mr. R's application stood out immediately...Our first Zoom call revealed a muscular man with a shaved head and a perpetually amused expression

It seems that everyone involved had dollar signs in their eyes. The cherry on top was moving to a country he knew nothing about for "lower taxes."

Re: Requiem for a Solar Plant

#109

Earlier quoted context omitted.

I'm curious what part of this you thought was an indictment on Texas. ERCOT has the most generator-friendly interconnection process in the nation and leads the country in both renewable generation and utility-scale solar installations. Mineral rights are dominant over surface rights in most jurisdictions, including other states like California. To call it "insane" just shows how little experience Mr. R has in land de…

> Mineral rights are dominant over surface rights in most jurisdictions, including other states like California. To call it "insane" just shows how little experience Mr. R has in land development. The insane part is the management of mineral rights, shattering into a thousand untracked shards and too ruinous to insure against without waivers. Not the existence of them. > The area OP is trying to develop in is a QOZ f…

You think either of those problems are Texas-specific?

Seems like people who zero industry experience got a taste of common issues that renewable developers deal with on a daily basis nationwide and decided that it must be Texas’ fault.

Re: Requiem for a Solar Plant

#110
If the author is reading this, and hasn't looked into it yet, there is a reasonable probability that he has a parasite infection.

My family lived in rural Malaysia for some time and some of us had similar symptoms for years before it was determined that parasites were at fault. Once they were killed, recovery was fairly quick.

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