I'm super excited about all of the great stuff happening in solar recently, but whenever I read about the economics of home solar, I'm also always reminded of how stacked the deck is for wealthy people vs. poor folks. There's a very large federal tax credit for solar investment. That's great...but, people who can't afford their own home get no such credit, and there's no way for them to get such a credit. That's a super common trait for lot of incentives; they go to people who need them least. And, the people who are getting these incentives, are also using a lot more power (bigger houses, more power), and so even with solar, their huge houses may still be contributing more to emissions than the poor folks who aren't getting any tax breaks living in apartments or rental properties.
I don't really have any answers on this, I just think it doesn't get talked about enough.
Maybe it would help to think of the credit as benefiting the solar industry more than wealthy people. It's a long road for new tech to reach economies of scale. If society has an interest in reaching that inflection point than the subsidy could be money well spent. Poor people will benefit when the price of the roof falls further; it may never have reached that point without early subsidy.
Perhaps it would be more equitable if Tesla received the subsidy directly. But that places the government in the business of choosing winners without the market signals of who would actually succeed if given the subsidy. Politically that's such a minefield. And no one ever lost votes for promoting a tax cut.
This is tautological; the reason poor people don't get a lot of tax breaks is because they don't pay a lot of taxes. The government does spend a lot of money helping poor people, but not via tax credits.
The tautology is in only looking at the subset of spending that's done through incentives, and then complaining that it disproportionately goes to people buying expensive stuff. That's what incentive means in this context: incentive to buy expensive stuff.
Anyway, you're coming at this all wrong. If I was in charge of designing this program, my mandate would not be to help poor people or rich people, it would be to increase solar power. How do you increase solar power? By paying for part of it. Who benefits? Whoever's buying it. Who pays to install solar power? Not poor people.
Or here's another way to look at it: What's the whole point of having a solar power incentive? To get more solar power. Now suppose we changed the law governing solar power incentives to exclude rich people (or tall people, or right-handed people, or any group of people). What would happen? Less solar power.
That might be a desirable outcome, if you are more opposed to rich people getting tax breaks than you are to fossil fuels. But in that case, why not just raise taxes on rich people, and leave the solar incentive out of this?
I'm speaking of incentivizing reducing power usage in the general case, not merely tax credits. The current solution is "let's give wealthy people more money to play with" (to questionable benefit to the general welfare). I should be clear I'm not saying I oppose tax credits for reducing usage; I'm just saying that poor people aren't getting the same kinds of benefits for using less power, even though they are using less power than the wealthy folks getting kickbacks.
And, again, I don't have ideal answers. But, I think there's a problem with the government consistently serving wealthy folks, even when those folks are living in much larger houses and consuming far more resources. Should a person with a 4000 sq ft house, consuming 5x the power of a lower income family in an 800 sq ft apartment, really be getting paid off to reduce their consumption?
If we're serious about the problem of climate change, energy independence, etc., we have to start looking at the actual numbers. If five low-income families are consuming the same resources as one wealthy family...what needs to change to bring the 5x family's consumption down? Solar incentives are one of the options; but, again, they serve only the wealthy (and, as far as I know, most solar installations do not replace the entire household usage, and only reduce it by 30-50%). That outsized power consumer is costing everyone more in terms of what it will cost to respond to climate change.
The question is why are the wealthy being rewarded when they're still consuming more than their poorer neighbors (well, probably not actually neighbors...the poor folks are on the other side of town due to zoning laws).
And, on another "class war" theme, the poorest people are the ones being hit hardest and soonest by the effects of climate change. The multiple "100 year record-setting flood" events in Austin destroyed poor southeastern neighborhoods twice in the past five years. Those were the lowest cost neighborhoods, and decisions were made by the Army Corps of Engineers to protect more expensive homes, and ignore the risks to the poorer neighborhoods. Lousiana, Florida, the Carolinas, have all had major weather events in the past several years (not all can be proven to be the result of climate change, but the severity and frequency seems clearly on an upward trend) and the impact has been predominantly borne by the poor.
OK...I went off on a bit of tear there. My point is that I feel a certain discomfort at how readily environmental causes are used to strengthen the position of those who are already wealthy and already relatively safe from environmental destruction, while the folks most likely to be impacted are invisible.
I applaud you for trying to think through this stuff, but minus all the ranting it sounds like what you're basically saying is that there are a bunch of ways we could be (but aren't) spending government money to reduce energy use while also helping poor people. How confident are you of this? Can you name a couple? For example, are you aware that most states already offer subsidies for buying more efficient appliances, and for installing attic and wall insulation, and for sealing heating ducts? (no citation, but I used to work at a non-profit that administers such programs) Characterizing the current policy as "let's give wealthy people more money to play with" is inaccurate, unless you think the people filling out the form to get a $50 rebate on attic insulation are doing so on a yacht.
I readily admit I am not a policy wonk (though I follow environmental issues more closely than most).
I am aware of green home initiatives at various levels of government (I've owned a home in the past, and have taken advantage of some of those). Again, I'm not opposed to the subsidies and tax credits that incentivize power reduction.
> Characterizing the current policy as "let's give wealthy people more money to play with" is inaccurate, unless you think the people filling out the form to get a $50 rebate on attic insulation are doing so on a yacht.
We're not talking about a $50 rebate. This is a tax credit worth several thousand dollars, for an upgrade that increases the value of a home by a notable amount, for a home that will probably still consume more power than a poor family's apartment.
My concerns about this are:
1. We are past the point of inevitable crisis in terms of climate change; we really can't do enough at this point to stave off significant human health, ecological, and economic impact. Even if we, as a nation, started making significant changes today (which we are politically farther away from than we've been in decades), we'd still face serious problems.
2. There are households that consume multiples of what poor families consume...and they're being rewarded with heavily discounted amazing new home upgrades because of it, increasing their wealth and decreasing tax revenue. Yes, it has a positive environmental result, and it may be worth it, but are there ways we can reward lower power users, too. Many municipalities have tiered power prices; e.g. .11/kWh for the first 500, .12/kWh for the next 1000, etc. Maybe that needs to be more aggressive. Directly addressing usage can incentivize a wide variety of changes, and discourage McMansions (which are disastrous from a wide variety of angles). Egregious energy consumers are externalizing their environmental impact. (This is even more true on a commercial and industrial level but that's another discussion entirely.)
3. Poor folks often can't get any of the stuff you're talking about (e.g. subsidies for insulation), because they rent. So, they are at the mercy of their landlord for how efficient their home is (and that's a potential problem with tiered pricing; there obviously needs to be incentives for landlords to increase efficiency and disincentives for owning inefficient properties, too).
I think you're taking my talking about the issues as being Policy Pronouncements, and that those pronouncements can be simplified into "Take money from rich people and give it to poor people".
It isn't (and I tried to make that clear in each of my rants on the subject). I am not saying, "These subsidies should not exist, and we should give money to the poor." I am saying, "Poor people are getting fucked daily, often to improve the position of wealthy people and in the name of something inarguably good, like 'protecting the environment'; how about we start trying to figure out how to fix that?" Add up the thousands of tiny ways wealth inequality is enabled in the US, often in the name of good things (like making neighborhoods safer, improving the environment, reducing drug use, etc.), and we end up with the low churn of wealth, and increasing chasm between the classes, that we currently see.
I get where you're coming from, I just don't think it's very relevant to solar power or energy subsidies. The rich were getting richer and the poor were getting screwed a long time before solar power was invented; I don't see how these subsidies are any better or worse an example than anything else. It feels like your issue is more emotional than anything else (hence why you keep saying "rewarded", as if homeowners buying solar panels weren't spending their own money on something that benefits their community). As in, it feels distasteful to spend money on something that benefits the rich, when you're hyper-aware of the plight of the poor. That's understandable, but it's a terrible way to think about a policy like this, because we spend about $4B/year on solar subsidies, which is enough to make a noticeable difference in solar installations but nowhere near big enough to affect income inequality.
Believe me, I'm all in favor of "Take money from rich people and give it to poor people". Which we already do, in a variety of ways! I just think we ought to be able to talk about specific policies like "Should we spend money on getting more solar power?" separately from that. You think climate change is an urgent problem? I agree, which is why the objection you're raising here seems like quibbling. If an asteroid were hurtling towards the Earth, and someone proposed that we build a rocket to fly a ragtag group of oilrig workers led by Bruce Willis to blow it up and save the world, would you stand up in that meeting and say, "Yeah, I guess that would work, but I'm concerned that it might exacerbate income inequality"?
I don't really have any answers on this, I just think it doesn't get talked about enough.