Emil Dimanchev

Hear hear!

To your point, I think the volatility in the policy environment that this has created is a key issue.

That's a good point. In an n-th best world, tax credits move us in the right direction.

On the specifics, is the claim that data centers will account all the growth in solar? That seems doubtful. Even if so, should they? Probably not if we want to hit our climate goals.

I think we might be disagreeing both on the specifics and the broader theory of change here. To take the latter, fundamentally, in the absence of a carbon price, a subsidy is a necessary substitute to drive decarbonization, given value deflation. Are you using LCOE to define subsidy need?

I am curious why you think it’s inadequate. Sure, tax credits are not the ideal form of subsidy but third best is still better than having no meaningful federal subsidies.

This question came up again - is removing wind/solar subsidies, like Congress has done, bad? Shouldn't markets reflect "the full cost"? Here is a succinct answer 👇

Climate change means that we need to subsidize clean energy well past the point these technologies are “mature” or at LCOE “cost parity”, which are both wrong frameworks for thinking about subsidies.

Deployment doesn’t necessarily only drive learning in the PV module cost. Could also drive learning in soft costs, though not sure how much of that we can observe, including in financing, on which there is some research.

It’s crucial to unpack “cheapest option”. LCOE is a common metric used in such arguments but is fundamentally an incorrect way to determine whether a technology needs subsidies.

One way to put it is that the consequences of “seeing the full cost” is that it leads to distorted incentives because markets do not see the full benefits.

It’s more expensive for the final consumer. Yes, overall, the cost of the tax credits is incurred too, by taxpayers. But there are multiple reasons why it’s important to distinguish between costs paid through power bills and through taxes including market failures and redistribution goals.

Thanks for sharing! It also makes sense to me that there will be an option value, since the PV owner has the flexibility to install batteries whenever.

My experience with Bluesky has been different but I am glad you are posting about these issues. We sure need open, well-intentioned discussion.

Hear hear!

Scholastica uses "community karma" points. Should be more widespread.

As a reviewer who gets ~15 review requests/week, an editor that has to send 50 requests to find 2 reviewers, and a co-author that watches really good papers get desk rejected, it sure feels like the academic journal system is broken.

I have some thoughts on what a better system would look like.

REPEAT Project just completed our rapid analysis of the impacts of the Senate-passed version of the One Big "Beautiful" Bill (OBBB), which the House is considering now, on the US energy sector and emissions. Still working up full report, but here is a sneak peak...
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It’s also ending subsidies though. bsky.app/profile/emil...

Alex Epstein bitching about how the new bill doesn't really repeal IRA clean energy credits

You love to see it:)

Eliminating welfare-increasing subsidies on wind and solar is still horrible. We can't let the Overton window be shifted so that simply defeating an absurd new tax on wind and solar is enough of a compromise.

Excellent question.

Debate and amendments continue today on the Republicans' One Big Horrible Bill. There's still time to make it less bad, especially on energy provisions.

If you want energy abundance, cheaper electricity, less pollution, NOW is the time to CALL Senate offices and tell them to...
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Hear hear!

Hear hear!

But the Senate goes beyond eliminating subsidies to imposing an entirely new tax on future wind and solar projects. This capricious turn-around will do even more damage because it will ruin the credibility of the U.S. government in the eyes of the energy industry and stifle investment.

Why energy security? Wind & solar run for free, or close enough, once they are built. That reduces how much we need to pay for fossil fuels at whatever price they are trading at. In an age of growing and uncertain electricity demand, the smart strategy is to invest in sources that are cheap to run.

Why innovation? It's well established among energy professionals that investment in wind and solar drives firms to make continuous technological advances that spill across and benefit their entire industries, not to mention leading to even lower energy costs for everybody.

The even stronger argument is simply that wind and solar are giving us a whole lot of valuable things beyond the electricity they produce. And if we get things we value, we should pay for them! These industries deliver public goods like energy security, innovation, clean air and a stabler climate.

We often subsidize sectors of the economy one might call "mature" like, well, agriculture, because the thing they procure is something we want to be cheaply available to everyone. We spread some of the cost across the tax base so that more people can pay less for something that's a basic need.

The talking point being used to legitimize eliminating wind and solar subsidies is that they are mature industries - so why subsidize them?

Actually, there are lots of reasons. But let's start with the simplest one...