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this post was submitted on 06 Nov 2024
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Renewables don't have tight profit margins, you're think of nuclear, maybe hydro.
Solar approaches a 100% profit margin after 20 years, wind only ever gets to 90ish but still has the same timeline. Without subsidies, neither oil or coal gets profitable.
No, i’m thinking of solar.
Over decades a solar system will pay back itself many times over, but that’s irrelevant to the question of how big of a money pile can business throw at politicians in the here and now.
That’s determined by the profit margin for companies manufacturing and installing them, which tend to be rather thin given the highly competitive nature of the market. No solar installer anywhere near the profit that oil companies are raking in, and the people owning the panels are usually paying off the loan to install them, using the profits to build more capacity, or saving, not buying off politicians.
Without subsidies there would be far less profit for oil companies, which is exactly why it is so important for them to ‘reinvest’ some of their recent massive profits into continuing and expanding said subsidies and slowing down the adoption of alternatives. Buying off the government with its own money is a benefit since it leaves more for them.
Individual solar is nice, but it's a fraction of a percent of solar capacity. No one is talking about that. Actual solar plants and installations are run by dedicated companies with huge profit margins that currently are all in expansion phases. They make up the majority of solar power installed and operated.
That market is competitive, but not hyper competitive and dirt has a decent lobbying budget, hence Dems including solar subsidies to appease Texas of all states.
I also wasn’t talking about individual solar. Utility solar is nearly always divided between manufacturing, installation, and the operator. The operator is the only one benefited by solar’s long term return on investment. Everyone else makes their money in construction, which is very much price competitive.
In my experience none of these groups however have even a fraction of the cash of a company like BP or Exxon Mobile, and what piles of cash they do have tends to be investment in rather than profit from. As it’s a lot harder to spend investors cash on buying regulators than it is to spend incoming profit on it this limits the amount that they can spend on such an endeavor.
There are also a lot more places banning utility scale solar and wind than are oil and gas, so delaying renewables rollout seems like an evidently effective strategy for limiting their lobbying power.