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0 pointsnandomrumber4mo ago0 comments

Isn’t that a self defeating loop.

Great profit to be had from solar because of expensive gas.

Let’s put aside that this isn’t good for the end user, as it openly admits the whole point of solar is great profit, rather than savings for the end user.

Soon there’s no need for the expensive gas.

Where’s your profit margin not?

0 comments

istjohn4mo ago

> Let’s put aside that this isn’t good for the end user, as it openly admits the whole point of solar is great profit, rather than savings for the end user.

The whole point of capitalism is that in a well-regulated, open, competitive market, an ecosystem of companies pursuing maximum profit drive down each other's profit margins as they compete for a limited pool of consumers. In other words, it is precisely the profit motive that creates savings for the end user.

glenstein4mo ago

Exactly. The same principles that apply for solar energy are already in place for natural gas and for every other form of energy and the fundamental logic of markets is that there's a price point consumers will pay that's also profitable for the company.

That didn't newly become an issue for the first time once solar entered the picture. There should be a word for this type of argument where people relitigate settled principles because they're discovering them for the first time.

manmal4mo ago

> the fundamental logic of markets is that there's a price point consumers will pay that's also profitable for the company

Electricity demand is price inelastic, meaning the consumer has no direct influence on prices, and will pay practically any price (well, up to a point). In the EU, the day-ahead spot prices are published every day at 2PM CEST, and it's a bidding market driven only by suppliers. If gas price goes up by x3, total electricity price average will go up by some linear factor, because gas turbines are absolutely required for surges/peaks - at least until we have enough batteries.

Calling this a market is stretching it IMO.

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jabl4mo ago

Even more generally, this applies to commodity markets. Price of potatoes is x EUR/kg, set by supply and demand. If some farmer can produce potatoes for 0.1x EUR/kg, they get to make a good profit.

Now electricity wholesale markets are an artificial construct, but it has been designed to mimic other commodity markets in that the producer on the margin sets the price.

nandomrumberOP4mo ago

It’s not like I’m discovering the concept for the first time.

I just think when people say things like “solar is cheaper than gas” they should say for who.

Solar is cheaper than gas for the capitalist.

And there’s no guarantee the capitalists savings will ever be passed on to the consumer.

In my market, Australia, the energy retailers are regulated to increase prices once a year. Increase prices. Never a saving for the retail customer. They’ve worked out that can skip all that messy market bullshit and just regulate annual increases.

Good work if you can get it.

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glenstein4mo ago

If solar is cheaper to produce (which it often is), there's room for undercutting natural gas and room for profit, a mutual benefit to customers and the solar industry where only natural gas loses.

j / k navigate · click thread line to collapse

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istjohn4mo ago

> Let’s put aside that this isn’t good for the end user, as it openly admits the whole point of solar is great profit, rather than savings for the end user.

glenstein4mo ago

manmal4mo ago

> the fundamental logic of markets is that there's a price point consumers will pay that's also profitable for the company

Calling this a market is stretching it IMO.

1 more reply

jabl4mo ago

Even more generally, this applies to commodity markets. Price of potatoes is x EUR/kg, set by supply and demand. If some farmer can produce potatoes for 0.1x EUR/kg, they get to make a good profit.

Now electricity wholesale markets are an artificial construct, but it has been designed to mimic other commodity markets in that the producer on the margin sets the price.

nandomrumberOP4mo ago

It’s not like I’m discovering the concept for the first time.

I just think when people say things like “solar is cheaper than gas” they should say for who.

Solar is cheaper than gas for the capitalist.

And there’s no guarantee the capitalists savings will ever be passed on to the consumer.

Good work if you can get it.

2 more replies

glenstein4mo ago

If solar is cheaper to produce (which it often is), there's room for undercutting natural gas and room for profit, a mutual benefit to customers and the solar industry where only natural gas loses.

j / k navigate · click thread line to collapse