Energy policy is leaving the middle class behind

If you've paid much attention to policy in general, you won't be too surprised by what I'm about to tell you about energy policy. Many of our well-meaning public programs use tax dollars for the near-exclusive benefit of the wealthy—the group of people who need those shared funds the least.

Today I spoke at "What Will Turn Us On in 2030?", a conference about the short-term future of energy in the United States. At the conference, I met Lisa Margonelli, director of the Energy Policy Initiative at the New America Foundation. Margonelli has spent the last year researching the effects of high gasoline prices on middle class and working class families. (I'll be posting some more about that project later.) Along the way, she noticed some serious problems with the way we're currently trying to change energy systems in the U.S.—problems that actually endanger our ability to make real, long-term change.

The green policies put in place by the Bush and Obama administrations are not only not aimed at the middle class; they’re benefitting the wealthy at precisely the moment that high gas prices have slammed the lower middle class.

Consider the flashiest green support for consumers at the moment: tax credits for the purchase of electric cars and solar panels. Buy an electric car (more than $40,000) or a solar array (more than $20,000) and get a tax credit. But most American families making the median income (about $50,000) spend more per year on their old used cars and fuel ($7,900) than they do on taxes ($6,000). So a tax credit effectively steers the taxes they do pay toward those in the upper income brackets.

... Green products and technology need government support. We’ve given so much to high-carbon fuels and infrastructure that they have a built-in advantage, but we can’t afford to depend upon them in the future. If we want to give green energy real political legs, policymakers need to be sure that the middle class gets some of the green goodies that can save money: more efficient vehicles, household solar panels or water heaters, energy-efficiency upgrades. In fact, making sure that there's a middle class market for these goods is part of actually building a strong U.S. green industry—in much the way we built markets for cars, for houses after World War II, and even for home appliances. It’s actually a lot easier to build smart policies than it is to build a killer electric car or a scalable biofuel. But for some reason, we’re not doing it.


  1. Well. we could stop wasting money making loan guarantees to dodgy companies like Sunpower and Solyndra.

    1. We could save even more if we stop wasting money giving tax breaks to successful companies like Exxon and Chevron.

      1. Ah, not-so-fast, know1!!  Those are “job cree-ate-turs”  (Don’t take there precious profits away.)

      2. Don’t disagree there. No subsidies for corporations, no tax breaks. Remove all deductions. Straight % tax if we need one at all. But most importantly, cut spending. 

        If we don’t cut spending, we’re doomed, simple as that.  But that’s a post for another day

      3. And even more if we were to stop subsidizing both.  Let them fight it out based on the laws of economics and physics.

  2. Ww, Jm, wy t b prt f th sltn by spwng yr bllsht FxNws tlkng pnts.  s smn frm ccpy Wll Strt ws qtd syng, “2…4….6…8….fck y!!!”

    As for this posting; I couldn’t agree more. I’ve always thought what a “paradox” green technology was to most of the middle to lower-middle class.  You see a McMansion going up a few blocks away and you hear the owner brag about the Geothermal heating unit, the solar powered water heater, and super-duper (yes, that is actually the technical name) efficient triple/quadruple/quintupled paned windows and then you think to yourself, “Yeah, this is exactly the kind of guy that needs to save money on his energy costs…”  (Perhaps it saves him enough money to take 5 vacations to Bali, rather than 4; who the fuck knows?)

    Meanwhile, the sad sacks like myself are still driving the car I purchased in 1999, filling in the drafts in my windows with silicone, and putting in CFL light bulbs with the futile hope that it would actually make a difference in my energy bill and it really doesn’t.

    Humanity, I am about to give up….The rich will continue to get richer and the middle class will continue to tread water.

    1. “Yeah, this is exactly the kind of guy that needs to save money on his energy costs…” 

      But bear in mind that “saving money on energy costs” is not always the same as “saving money overall” – or at least not for the first X-to-XX years of the energy-saving doodad’s lifespan.

      The automotive press has made much of the fact that, for the typical driver, buying a Prius doesn’t actually save money – the higher gas mileage is outweighed by the greater cost of the car.  (And for ‘atypical’ drivers like me – less than 2K miles per year, living in LA – it’s even worse.)

      But most of the Prius owners I know are well aware of that, and are willing to pay the (fairly modest) premium  to help reduce our dependence on foreign oil and to pollute less.

      A typical grid-tied photovoltaic solar-energy system, even with a hefty subsidy from the LA DWP (the DWP likes grid-tied solar because it’s local, non-polluting, multiply-redundant power that automatically peaks at the same time that demand peaks), will still take about 15 years to break even. 

      Which means it’s 15 years until you save any money at all.  For the first 15 years, your power actually costs *more*, because the energy savings haven’t yet recouped the up-front investment.

      (And yes, I know about lower costs for DIY systems – but not all of us are capable of clambering around on rooftops dragging 200-lb solar panels.  Not without new knees, anyway.) 

      (And hoo boy, are those expensive!)

      In the long run, they’ll save money (as well as energy), but you need to be able to make that up-front investment, and then wait for the long-term returns.

      But it has always been thus – heirloom-quality furniture that will last for 100 years may cost ten times as much as cheap borax that wears out in  5 years – but in the long run, it’s less expensive.  Good, well-made clothes are cheaper in the long run than shmattas from Wal-Mart.   A well-built newer car costs less over its lifetime than a series of decrepit old jalopies that keep breaking down.  

      And so on.

      Sometimes effective energy-saving strategies require up-front investment that only pays off over time;  and sometimes, even though they save *energy*,  they cost *more* money.  

      So it’s not surprising that those strategies aren’t as accessible to the poor and lower-middle class folks who are scraping by from paycheck to paycheck.

      But a lot of things need well-heeled early adopters to drive prices down – CFL bulbs used to be so expensive that they rarely saved any money – now they’re much cheaper, because of volume production.  Tesla’s electric roadster is a high-end, high-performance, expensive sports car – but its sales have provided the capital and driven the technical improvements that will allow Tesla to build the less expensive Model S family sedan.  And there are plenty of other examples.

      If your neighbor’s energy-saving McMansion saves so much energy that he can afford an extra trip to Bali, that would be impressive.  

      But it probably won’t – not for many years, if ever.

    2. nuorder, perhaps you can take comfort in the knowledge that Uncle Moneybags’ heat pump and quintuple paned windows, just as much as your caulking and CFL’s, are of microscopic effect when compared to the roaring coal and oil furnaces of Chindia.

  3. “For some reason” we’re not doing it?

    I swear I don’t usually do this. But.


    The all caps means I’m super cereal.

  4. Not sure where the 40K electric car comes from, but there are cheaper alternatives.  Same with the 20K solar power.  In cali Lowes has been selling $800 DIY panels.  Most of the cost in solar panels is the actual installation, not the panels, so these really help.

  5. So I’m upper class because my family has solar panels and a Prius, having raised the cash by selling a spare house into the bubble?  I thought I was just being prudent. I’d better learn to duck.

    1. “I thought I was just being prudent. I’d better learn to duck.”

      The historical term for your economic class is “kulaks”, and whatever fiscal or physical penalty you thought was to be directed at the billionaires will, in due course, be directed at you.

  6. Unless that spare house was because a relative died, pretty much on that upper side of middle class then.

  7. What boggles my mind is why as a nation we leave our energy dependency up to private corporations?  I know the government has rules about producing things, but that doesn’t mean that we can’t have contractors do it for us.  Or instead of pouring money upfront into companies that don’t have a track record, setup something like an X prize.  Say we want solar cells that can achieve 30% efficiency and cost less than $4 a watt to sell (just examples), offer up some prize money and a hefty contract.  At the very least the government could do a lot better job looking over our energy systems as they are.  The vast majority of our fuel production comes from gulf coast states – ie. Katrina doubled the price of gas in less than a week.  Our electrical grid has some redundancy, but certainly could be beefed up (and that includes capacity as well.)  To me our energy infrastructure is a critical part of our nation and economy, making sure it is functioning well should be a nation wide priority, and that should make it one that the government should be in on.

    1. Because efficiency and government go together about as well as government and lack of corruption. 

    2. Regarding solar cell costs- the primary expense of a residential photovoltaic system is no longer the panels. It is the wiring, mounting, and inverter. The panels are now comparatively cheap.

      The five panels at our offgrid cabin cost less than the wiring, charge control, and inverter. We made homemade mounts, but a commercial tracker alone would have cost more than the panels. The batteries, cables, disconnect, and battery box together also cost about as much as again as the panels. Of course a lot of grid-tie installations use no batteries, but my point is that pv panel costs are not the majority of the cost of a residential photovoltaic system.

      1. On the fence about adding panels to the boat, on the one hand, “free” electricity, on the other, we are moored in Seattle…

    3. Our local smaller town is currently debating allowing a land owner to put wind turbines on his property.   A commenter on the local paper’s article gives a good summary of how the government involvement with projects like this really screws everything up (and in particular really screws the people with taxes):

      (see linked comment from “Neighbor”)

      1. So I read the article, but I think I need some more background on what your local situation is before I could really comment on it.

        -Does the local property owner want to do this themselves?  Either for personal power or to sell back to the power company?

        -Does the local power company (or other private company) want to use their land to install their own turbine?

        -Are we talking one, ten, hundreds here?

        I don’t disagree with some of the article.  Yes we use taxes to build schools, and then the county/city gets ownership of the school once it’s complete.  Your taxes go to keep paying for that school, teachers, ect..  If electric companies only received an upfront grant from the government to build their projects then this would no different.  I don’t disagree that their is corruption in the system, but you have to pay for the power some how.  Either it comes out in taxes or you pay the power company directly.

        I also don’t understand this line: “Understanding how this works makes it possible to explain how they can
        afford to build these things so far from the point of sale”.  Isn’t point of sale covering thousands if not millions of square miles?  It also pretty much sums of NIMBY.

        My issue on governmental involvement is that there isn’t a big picture.  If the DoE sat down and said there needs to be another set of tie lines run between different regions to improve fail over support, who would pay for that and why?  There might not be enough financial reasons to support either of the electric companies to outlay their own capital when the current setup works, so they have no motivation to do it on their own. 

        An example would be your car vs. a military jet fighter.  Your car is designed to last a good amount of time without failure, but at some point something will break and leave you in a bind.  Now the fighter has redundant systems, so when it’s damaged another system can take over and the pilot can make it back safe (or at least have a better chance).  This adds complexity and cost that is not needed in your car.  The same thing can be applied to most of the critical infrastructure in the US.  Electric companies build out what they need, oil companies refine at the point of import, ect..  Natural disasters, which seem to happen more than people would like don’t just affect the locals, they can affect everyone.

        In my mind the government should be looking out for this county’s best interest.  Electricity, fuel/oil, water, are all vital parts of that interest.  (That don’t just mean throwing money at it either.)

  8. Well part of the issue is also making people understand what their return on investment could be.

    Like a GE hybrid hot water heater.  Sure they cost about $1400, while a similar electric hot water heater would be about $400.  And that’s a lot to most people.  But that hybrid unit will consume about %50 less energy than the regular one (maybe more).  So in about 3 or 4 years it will pay for the difference and start saving you money.  For a lot of people all they see is the extra $1000 up front, not the $2000 dollar savings over 10 years.

          1. Odd, I moved into a new Energy Star 2.0 house about 2 months ago.  It has CFLs everywhere.  I’ve had 3 go out already.

            Maybe the technology is ok, but they are all manufactured in China.  Chinese manufacture is not known for its quality, but is price and manufacturing defects.

          2. I have some older GE bulbs I got unopened for cheap on ebay? They’re 13 watts, and the building I live in is from the 1910s. I guess I could just be lucky.

    1. Lowes has a nice 40 gal unit, (with an awful long url,  If the url got broken, try searching for hot water heater at  for $219.  Of course, it’s already insulated.

      Seriously, talking about efficiency wrt a *heater*? hello!

      1. But I’m not sure what you are implying?

        Even if a standard hot water heater has an efficiency of 1, you are still going to save money by using something like that GE hybrid hot water heater.  It has an efficiency up to 2.35, and with the amount of power a hot water heater uses it would pay for itself during it’s lifetime.  There could also be a benefit form switching to gas depending on the local rate and volatility of the market.  (And if your house already has a gas service or not.)

    2. People see energy sector profits and costs rise so rapidly these days. What they save by buying this unit in the long term is only relative to that helium filled utility cost they’ll be paying year to year. Consumers are feeling more and more conflicted in the choices they make because the central issue to them is not energy security policy – its what’s going to be the more affordable or self sufficient fuel for them in the future. That 3 or 4 years is more than likely going to become stretched due to a lack in competition in the energy sector. Peoples wages do not increase fairly with inflation, increased taxes, food prices and not with these utility costs either.

  9. “If we want to give green energy real political legs, policymakers need
    to be sure that the middle class gets some of the green goodies that can
    save money: more efficient vehicles, household solar panels or water
    heaters, energy-efficiency upgrades.”

    Except that’s exactly what the tax credits for electric cars program does. An electric car is expensive to make, but the price for making one will go down with mass production. But car companies won’t mass produce until there is sufficient demand. Giving tax credits to purchase electric cars will increase demand, allowing the price to go down. And as the price goes down, middle class people will be able to afford them. It’s the same principal behind early adoption in the tech world: Apple assumes that enough people will want to buy their next iWhatever device for $499, and as the iWhatever becomes popular, they can release subsequent generations of it (with more features and refinements) for $399 (which allows Google to release its iWhatever clone for $299, etc.)

    Oh, and there are already tax credits (typically State Income Tax or utility credits like with companies Con Edison) for purchasing solar panels, energy efficient water heaters, energy-efficient upgrades, etc.

  10. “Many of our well-meaning public programs use tax dollars for the near-exclusive benefit of the wealthy”

    I would contend that the Primary Purpose of most “well-meaing” programs is to benefit the Wealthy.

    The formal sentiment is cooked up as an excuse to justify the transfer of tax dollars to whatever Corporation, whose associates most typically gave generously to whatever politician. The “well-meaning” part is merely the Window Dressing to sell it to the taxpayers.

  11. If you can’t afford to justify the cost of energy savings that have a reasonable ROI (1-5yrs), then you shouldn’t own the house.  You can’t afford the maintenance, let alone making improvements.

    The same goes for needing a second job to pay for transport to your first job.  Do what I did – move closer to work.  I rarely live further than a 30min walk to work.  You’d be amazed at how much you save!  Some friends moved 30mins closer to work – even though they paid twice the rent, they still ended up considerably better off.  Even before considering the hour a day they got back.

    Insulation is cheap, draught stopping is cheap, stopping dripping taps is cheap, checking the fridge seal is cheap.   If you live somewhere where it doesn’t go below 2C, you don’t need a ground loop heat pump, an air driven one will work fine, and they can be found cheap too (US$350 here in NZ).

    If you’re someplace else, you’re probably better off burning hydrocarbons for heat anyways.

    Check to see if your power company has time of day charging and then buy some cheap timers for your appliances (dishwasher, washing machine, dryer).  I’m saving 30% on my power bill just on that.

    Finally, it is rarely worth throwing out an old appliance for an energy efficient one.  People who do it are doing it for “Look at me, I’m environmentally friendly!” points, no other reason.

  12. TL;DR ahead.

    1. Yeah, corruption is the plague of *every* system where only a few people have the power to make decisions about spending or laws. But think for a moment: who corrupts them, who pays the bribes to get advantages like government orders, lax laws, building permits etc? Since we do not live in a system where the people aka the state owns everything, you’ll always find that private companies or persons spend a lot of money to influence / corrupt that system they are complaining about as soon as they turn around. Their wish to reduce government springs from the wish to not being controlled and not having to spend money on bribes, but still being able to do what they want.

    2. Cutting government spending isn’t the solution to everything, especially in a world wide recession like now. Business and consumers are already trying to save as many bucks as possible, thus reducing profits and demand, thus leading to more job cuts or outsourcing, thus reducing… etc.So instead of cutting g.s. we need to increase it, or at least stop subsidizing profitable projects and rather channel this money into projects which create new jobs AND have the perspective to survive on their own in the future. See 5.

    3. Tax breaks are nice if you actually do pay taxes. They just don’t help if you earn so little that you don’t pay taxes, or just pay a ridiculously small amount of taxes. Maybe you’ll not pay taxes for the next 2 or 3 years, but if so you’ll typically earn so little you’re also unlikely that you can afford to pay your “green” car, solar panels, new heater etc. up front.

    4. If you can’t pay your stuff up front, you’ll need a credit somewhere, which typically raises the price you have to pay for whatever you’re financing with it due to interest. The lower your income, the lower your possible rates. The lower your rates, the longer you pay. The longer you pay, the longer you pay interest. The longer you pay interest, the more interest you pay. The more interest you pay, the more you pay. The more you pay, the less you save through tax breaks.  So to speak, what you would have saved through tax breaks gets eaten up by interest rates, thus only helping the bank or whoever gave you credit.

    5. Instead of only giving tax breaks consumers should be able to choose between a tax break and a low interest or even better an interest-free credit, if they buy certain “green” products or undertake house / household improvements reducing the consumption of energy or increasing the production thereof, like insulating, energy efficient heating / cooling, installing solar panels etc.

    So instead of only passing on tax earnings to those who have enough money to give out credits, we would use those taxes to let people buy “green” products, thus not only increasing demand and creating jobs (see 6) but also increasing independence from oil imports and lowering the need for risky and toxic-waste-producing nuclear energy sources. Which would of course require…

    6. Funding guidelines should require minimum working / production standards. Like 75% of production stages being based in the US, workers being paid wages which in turn generate income tax for the state, and the companies paying a minimum percentage on their earnings within the US. All to make sure the tax money being spent isn’t channeled into foreign countries or tax havens, just increasing profits instead of increasing employment and tax income.

    Of course we’ll not immediately get back as many bucks as are being invested, but in the long run this could help create production knowledge and new technologies, giving manufacturers an advantage on the world market and increasing exports (and fuck yeah, the US could need more exports), thus generating revenue.

    To break it down: none of the people in charge deny that it’ll be necessary to spend money  to keep the system going. The question is: where will we put that money? I say we should not put it into the pockets of the banks or companies who use it to pay dividends to their shareholders. That was done when the housing bubble burst, and everyone can see the result.
    I say put the money into the pockets of those who are willing to spend it on products meeting the aforementioned guidelines, create demand and thus jobs which create income and taxes.

    1. “Many of our well-meaning public programs use tax dollars for the near-exclusive benefit of the wealthy”

      If only this could have been predicted ahead of time.  Well, we’ll know to avoid these problems in the future … right?  The fact is that when you give a bunch of disingenuous popularity contest winners a bunch of money to hand out, it’s simply ridiculous to expect that it’ll be distributed fairly.  Of course the majority is going to go to their friends, supporters, and contacts.

      @google-4c38cc0c43aa38219595a5539f8f99eb:disqus :

      1) Who’s complaining?  I don’t see GE lobbyists working for smaller government and less regulation; indeed, it’s precisely the opposite.  The fact is that most large corporations are very comfortable with regulation, and are perfectly fine with a government-granted monopoly like utility and cable providers.  What’s better than guaranteed profits and virtually captive customers?  Large corporations hate having to deal with a competitive market because it means they actually have to work hard to please their customers or they’ll go out of business.  Why would they do that when they can use the government to make things easier on themselves?

      2) The problem with this comment is that you simply assume that all government spending is beneficial.  There’s at least two problems with that – the aforementioned crony capitalist corruption from #1, and the simple fact that government spending can be wasted or inefficient, or even actively negative and economically damaging (see military spending, especially).  Anyone with money can create jobs – they can hire people to dig giant holes with spoons, and then fill them back in again.  Does that help our economy?

      What’s needed here is not just spending, but accurate, beneficial spending on creating new, profitable firms – growing capital, and thus our economy.  Historically, the government has proven to be pretty awful at such spending, because of systemic problems of not being subject to profit and loss signals and price signals.  The market, by contrast, is merely bad at making such decisions; however, it has the corrective mechanism of bankruptcy to weed out the bad choices while the good ones prosper.

      6) This is the way things are now – and you see how it works out.  Most of the things you mention are already in place, and are some of the contributing factors to the crony capitalist feast.

      “To break it down: none of the people in charge deny that it’ll be necessary to spend money  to keep the system going. The question is: where will we put that money? I say we should not put it into the pockets of the banks or companies who use it to pay dividends to their shareholders. That was done when the housing bubble burst, and everyone can see the result.”

      You’re absolutely right – the question is: where will we put that money?  Except that “we” did not bail out the banks.  “We” did not protect the interests of our rich friends.  Our government did that, which is a group of people, notably ungoverned, and all members of the 1%.  The last thing “we” want to do is surrender more of our earnings to those who have systematically squandered them.  We need to make those decisions for ourselves, because we can make better decisions about what to do with our own money than they ever could.

      1. Hi Matt,

        “The problem with this comment is that you simply assume that all government spending is beneficial. […] What’s needed here is not just spending, but accurate, beneficial spending on creating new, profitable firms”

        Please check my text again, I see that problem and I elaborate on at least one aspect of it in the same paragraph :

        “So instead of cutting g.s. we need to increase it, or at least stop subsidizing profitable projects and rather channel this money into projects which create new jobs AND have the perspective to survive on their own in the future.”

        Or like you say:  accurate, beneficial spending on creating new, profitable firms.

        “however, it [the market] has the corrective mechanism of bankruptcy to weed out the bad choices while the good ones prosper.”

        In theory, yes. In reality the bad choices get bailouts. :
        I *do* agree with you that the current system of elected representatives controlled by no one can’t achieve real representation, tho. What we need is more direct democracy.

        I think all that “the state / government can’t do X, because it’s bad at it / everything. X should rather be done by the free market” is bs. Yes, there were government projects which were a waste of money – but they also had successful ones. Roads, the space program (just imagine our modern world without GPS, or without satellites at all), postal services, workplace safety regulations etc.

        If you ask me, telling us how bad the state / government is at everything is just a strategy to get into markets which are currently state-controlled. The state is able to tackle huge projects which cost a lot, like delivering mail to everyone, no matter how far out you live. Private companies would propably be able to do that a bit cheaper, but only through cutting back at something else. maybe you’d only get your mail once a week instead of each day, or you had to drive to the next town to pick your letters up there. 

        To think that private companies can do everything better, cheaper, always is just as naive as other generalizations.

  13. Oh, I disagree, and heartily. Other than with the general idea that the government is leaving the middle class behind in every way imaginable.

     I really don’t understand this need to see the upfront costs of solar defrayed immediately. Who cares if it takes 15 years to reach the break-even point? In how many years will you realize “break even” on your gas-powered car? People never even consider “break even” on a car, or computer, an engagement ring, a ridiculous $20,000 wedding, a night at the movies, or rent because these things are a priority for them. We don’t expect to get something back. What about all of the cute consumer goods promoted on Boing Boing? The sugar-skull watch for example. I mean, I REALLY really want that. Just not enough to pay $200. But someone will pay that much, and they never expect to break even.

    But let’s say it was important for someone to install solar AND reach break-even. It still makes sense:

    We have solar water heating and solar electric. We’re not rich. In fact, we pretty much emptied out most of our limited savings to do this. We did this because our saving were disappearing in the black hole of the stock market and securities anyway. We also saved up some more by skipping vacations and other non-essentials. We live modestly. We keep no more than one light bulb on somewhere in the house at any given time. We use a clothesline to dry our clothes. We’re not rich. But, yes, it is true that it helps to have cash upfront to install solar.

    1) Let’s start with solar water heaters. A few thousand dollars up front. Impossible for the middle class? No–not if solar is a priority. It pays for itself in three years tops. After that, hot water is essentially free. I simply don’t understand why half if not all of the rooftops in the southwest aren’t topped with solar water heaters. I live in Hilo, the cloudiest, rainiest city in the USA. And even here, it makes sense for people to have solar water heaters because electricity is 3 times more expensive than on the mainland. Solar water heaters show up on modest and lavish houses alike.

    Our solar water heater up-front cost was $7,500. (Costs are much higher in Hawaii due to shipping.) We recieved a $1000 instant rebate from our electric utility, bringing it down to $6,500. We timed installation for the end of the tax year so that we would not have to wait long to recieve the tax benefit. Our taxes aren’t high since we don’t earn a lot.  The benefit carried over to the following year. The net cost to us worked out to be $2,300 after rebates and credits.  Our electric bill immediately went down from $200/month to $120/month. We immediately started saving $80 a month in electric. The $5,000 in credits really helped us out a lot. It made it doable when we were first getting our feet wet.

    If someone did not have cash up front, they could easily take out a short term equity loan to cover the upfront costs until tax credits kicked in.

    2) Next, the one thing that is almost free and requires no tax credits: a simple clothesline. Again, I live in the rainiest city and I make it work. If you have a yard, you can do it. If you have neighborhood or municipal regulations against it, do it anyway. We have every right to use our yards as we please. In tough times, people will probably be understanding and you could probably get neighbors on board.

    –> Does the above really describe something out of reach for the middle class?

    3) Solar electric takes more resources, that’s for sure. Still, it is not out of the question for someone in a middle-income bracket to save up $20,000. After credits, that cost is much less. Potentially around 60% less, depending on the state. The sunnier the state, the quicker it will be to “break even”. Most middle-income people probably have some retirement savings. Makes perfect sense to me to liquidate some of that and put it in a system that will reduce future electric costs to close to $0.00. Again, I know people struggling might not have savings, but the premise was that the middle class in general can’t afford to take advantage of credits.

    4) Electric cars? Some newer ones like the I-miev will be about $20,000 after credits. That’s middle class. I don’t see the point unless someone had excess solar electric. Otherwise, it’s still coal or natural gas making the electricity, yeah?

    I do agree that the government could do much more. The money wasted on these #@!!*& wars and prisons and–especially–bank bail outs blows my mind. How many solar systems could have been provided simply for free with all of this money?

    On that, I change my mind. The government could be doing a whole hell of a lot more for the middle class.

  14. One thing on the whole transportation thing that would help…

    Roll back the NHTSA, or create a “quadricycle” class of vehicles that has four wheels, no passenger restrictions, and can be fully enclosed, but only needs to meet motorcycle safety standards if it’s below a certain weight.

    As it is now, I’m designing a three-wheel (why three? three is a motorcycle, legally), tandem seat vehicle for fun, in my spare time, with a target fuel economy of 150+ mpg highway, and a target price of $5000 if I ever decide to go into production – cheap enough that a large segment of the population can afford to buy one and get a quick payoff period compared to fueling a normal compact or subcompact car, while still being able to own a car that’s large enough to do everything. (That’s the problem with a lot of the ultra-efficient cars nowadays – they’re too damn expensive to be a second car, and some of the best ones are too small to be most people’s only car. So, then, the automakers make them bigger, so they can be most people’s only car, which compromises the efficiency, and makes it even more expensive.)

    Here’s how the math works out on that…

    The average American driver does 15,000 miles a year, IIRC.

    In one of the 40 mpg gasoline compacts (which could do the role of “everything” for many people), that 15,000 miles a year translates to 375 gallons – at the national average gas price of $3.433, that’s $1287.38 a year.

    Let’s say that somehow you manage to use my design for 15,000 miles in a year (tandem seat doesn’t add much weight, and adds occasional passenger carrying capacity or decent cargo carrying capacity)… that’s only 100 gallons of fuel (diesel, in this case, at $3.749/gal), or $374.90 a year. So, every year, you spend $912.48 less, and in slightly under 5.5 years, you’ve paid for the vehicle, and are now ahead. (That’s an 82,194 mile payback period, FWIW. Far less than many high efficiency primary cars.) Oh, and the 40 mpg car is still sitting in your driveway, for when you need to move 4 people or a larger amount of cargo.

    1. Great post.

      It would be child’s play to build a practical, affordable 50 mpg family car today if we hadn’t sold out to the Nerf Civilization advocates who insist on every element of life being airbagged, foam padded, and armor plated for our own good.  

      1. For that matter, it wasn’t that long (15 years) ago that you could buy exactly that – a 1997 Passat TDI. EPA was closer to 45 originally, and less now, but plenty of people got 50 real world.

        (Then again, the 2012 Passat TDI comes close…)

        1. As usual, the rule of two applies.  “Your car can offer a massive safety cocoon, be environmentally friendly, and be affordable by Joe Sixpack.  Pick two.”

      2. It is child’s play, and most of the world has them.

        It’s even easier to design a city with decent public transit such that most people choose not to own cars (though they may rent them from time to time).

        1. “most of the world has them” – much of the world does not have our obsession with so-called “safety”.  I think my point still stands.

          “It’s even easier to design a city with decent public transit” – It’s pretty simple to design any city you fancy.  Replacing existing bricks-and-asphalt cities with your design is perhaps just a wee bit more challenging.

          1. Yes, redesigning existing cities is hard, but not impossible. It is the work of generations. It’s been done before, though.  Cities were redesigned for trains, then for cars and buses and subways and all the rest. And replacing a cities of cars with a city of buses is not nearly so difficult if we put anywhere near as much effort into mass transit as we do into making cities car-friendly. Here’s an idea: eliminate most on-street parking meters and make those areas dedicated bus lanes. Another: change zoning laws to encourage walkable communities within a larger city, to eliminate the need to drive for many short trips.

            And the safety of larger cars is partly an illusion. If two vehicles collide, then the larger vehicle’s occupants will indeed likely fare better. But *both* drivers would be better off if *both* vehicles were smaller. It’s an iterated prisoners dilemma, and we in the US have all chosen to defect. We could, instead, have established in advance a commitment mechanism that encouraged cooperation to increase safety (like taxing larger, less efficient vehicles more heavily).

  15. How about we require car manufactures to raise mpg efficiency fleet wide.  Average it across all the cars they sell.  That way, they have to sell cheaper efficient cars to balance the gas guzzling SUVs (or make the SUVs more efficient).

  16. The middle class is not being left behind, it is being decimated.  90% will no longer be able to afford their homes, while 9% will stay put, and 1% will move into “the rich”.

    1. 1% will move into “the rich”?

      A picture being worth 1,000 words and all that, here is my favorite Economist cover of all time:

      I would argue that the number is closer to 0.001%, if that.

      (Ignoring one of my pet peeves….now that online dictionaries are starting to include the inaccurate definition of “decimated”.)

  17. Obama’s energy policy is not much different than Dick Cheney’s. The president is giving lean guarantees to the dead-in-the-water nuclear industry that are 10 times what Solyndra got, and no one’s reporting on that story.
    During the recession in 1977 I was hired under the Comprehensive Employment and Training Act to install solar air- and water heaters on low income homes — mostly elderly homeowners. For a few hundred bucks that would otherwise go every year to subsidize fuel oil bills, we provided systems that saved serious money over the long term. My favorite was the “bread box” solar per-heater. It was just a black 80-gallon tank in an insulated box that raised the water temperature from 40 degrees to sometimes over 100, which saved the cost and extended the life of a conventional water heater. We also did attached greenhouses and drain-down water systems with heat exchangers, often banging out panels made from half-inch copper pipe and recycled aluminum offset printing plates.
    I was all set to make a career of it. Then Reagan got elected.

  18. While I do see the point of this argument that current alternative energy policies leave the poor and middle-income behind, I think this is a misunderstanding of what the goal of these subsidies are. These subsidies, like many government subsidies, are fundamentally conservative in that they are trying to avoid government competition with the capitalist (pseudo free-market) economic system. The goal of these subsidies is to accelerate the rate at which new technology can compete with legacy technology on price. The goal is to help the technology, not individuals. The idea being that if the price for the technology falls enough, it will be able to compete on its own and will be accessible to more people on a competitive basis.

    If you want to state that the goal is unfair, that is a valid argument to hold. But to declare that these subsidies are not effective because they do not address an concern that is not their goal is the wrong argument. This type of argument actually obfuscates the real issues that need to be debated (e.g. distribution of wealth, government influence in markets, the value of public resources etc.).

  19. Maggie – you’re right about the Federal Incentives being skewed towards the more capital intensive investments…but don’t forget that the states & municipalities (in *some* cases) have stepped in to fill the gaps in funding. 

    I’ll use DC as an example – both because you were just here and because I call it home.  Firmly planted in the middle class, I just had to replace a broken washer & dryer and about a year ago also replaced an aging fridge.   DDOE helped out by offsetting both purchases (about $200-$300 each time). 

    Obviosuly the energy savings from the washer and fridge alone won’t match emissions reductions from PV panels or solar hot water, but the fact that the DC govt. was willing to buy down the cost of energy efficient equipment to at least the level of standard equipment is one example – the DSIRE database has hundreds more.

    I do wish that fuel economy incentives were more stable and inclusive.  My recent purchase of a 42mpg diesel car missed the cutoff deadline for a tax break by a couple months.  And now I’m hearing rumblings about some of those diesel purchase incentives coming back…

  20. Arizona had a real boondoggle on tax credits for electric cars back around the turn of the century, under Governor Jane Hull.  (And what is with this state requiring every governor to have “Jan” somewhere in her name, anyway?)  It’s a lot like what you describe: it was meant to push renewable energy, but instead it just wound up giving free golf carts to professional athletes.

  21. Ugh!  They wrote a bill to encourage Green energy use, and they’re unhappy when the rich take advantage of it.  At least there’s people using their incentives!  Why are we assuming that Green tax breaks have to work double as an equality measure?

    1. Why are we assuming that Green tax breaks have to work double as an equality measure?

      I’m not completely sure, but I think maybe because we’re not awful people.

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