I worked for about 8 months on an internal product for doing transmission studies at a large utility company. Basically, it would feed a PSS/E [1] file specifying most of the transmission grid into a power flow simulation software called TARA [2]. We would add a few extra elements to the grid to simulate a wind or solar plant. TARA would spit out all the components that would be overloaded, with or without contingencies. We would read the results and estimate the transmission costs.
Essentially, we were replicating the process that the ISOs used internally. The users of this product were all former ISO employees. The goal was to speed up the process of determining whether transmission costs were going to ruin a project before any money was spent. ISOs take months to do their analysis. The users told me that they were usually looking for $0 transmission upgrades on $50m+ projects.
The grid and contingency files from the ISOs were under confidentiality agreements. This rubbed me the wrong way from a competition point of view. We also had data about projects slated to be built which could take away capacity from our projects.
I could see a SaaS in doing this sort of analysis. It's probably bureaucratic between reselling TARA, NDAs, and maybe legal issues if the analysis was wrong. I have doubts about the market, most of the money is in big projects at big companies that are already doing this sort of thing.
imo, that's basically the dirty secret of grid data, post 9/11 it seemed as if everything went behind the CEII wall, but in reality it has always been that if you're a legacy player or have the money you can make sure you have access to everything.
It's a thorny issue and something I ponder in my day-to-day[0]. We're members in ISOs where it makes sense, and can provide CEII data once we've confirmed customers already have access, but I would love to be able to show some of it publicly. It's also odd how things vary from market to market. Transmission outages: public everywhere, except ERCOT, where they're considered Secure. Generator bids: anonymized and delayed by up to 90 days everywhere, except ERCOT, where it's 60-days and not anonymized at all (yes, ERCOT is different wrt to FERC jurisdiction).
Years ago I worked at a market monitor[1], and we got everything, just cloning the changes to ISO databases overnight every day, second-by-second PI (plant information) data, it was awesome. The potential advantages from data asymmetry are big enough that there are multiple companies with physical sensors out in the world measuring power lines in different ways to try and reconstruct grid activity in real time, and then others doing it entirely from access to CEII and a deep understanding of how the grid function. But all of this is heavily oriented towards traders, not developers, although I would use trading tools when developing projects because they were the most advanced.
This is a good story that taps into a lot of the systemic failings in America that hinder progress. Failure of the state to prioritize energy sufficiency over hypothetical mineral rights. Failure of utility companies to maintain their infrastructure to modern standards. Failure of governments to produce consistent and predictable business environments. Failure of bureaucracy to prepare creators and visionaries for success.
All of this results in good intentions being squandered because too many entrenched entities would lose too much hypothetical value on a balance sheet to just do something better for everyone.
cavisne 19 hours ago [-]
Its a good read but are his intentions unambiguously good? He had a windfall from crypto (ie contributing nothing to society). Then he was desperate to avoid paying the tax he owed on that windfall.
Is there any actual need for this Solar Farm in the middle of nowhere (that was only built there because of a tax scheme)? Are Texas ratepayers meant to cover the cost of the interconnect in their $/Kwh instead of him?
Better to just pay his taxes and move on, and leave the subsidies for an actual useful solar project.
EDIT: Oh and mineral rights are basically the original cryptocurrency/memecoin, so its somewhat funny that they came into play
5 hours ago [-]
xhkkffbf 7 hours ago [-]
These are all fair points.
The extra costs and limits are ostensibly because of safety. Yes, I know that engineers can game the system, but they're listing real reasons why the plant should shoulder the costs to the larger grid.
oezi 12 hours ago [-]
As a European three things stood out for me:
- He didn't consult with somebody who had any experience in planning such a project, but a person who - while maybe personally impressive - had zero experience and started by writing scripts to find suitable properties. Isn't the project already doomed at this point? You are looking to invest 7m USD, who will you consult for this?
- He wouldn't do the project unless he was able to get insurance for it. The whole issue of exploring and acquiring mineral rights was just to get insurance for the project. Why not forego insurance? EDIT: Okay, needed insurance for financing the project. I assumed the project would be financed through the crypto gains.
- From ballpark numbers his projected cost of 1,37 USD per Watt DC seems very high (~2 USD per Watt Peak AC). In Europe large scale PV has reached 600 EUR / kWp so building a 4.5 MWp plant should cost more like 3m USD rather than his projected 9m USD. Of course 4.5 MW is small (10000 panels) so this might be part of the issue.
DamonHD 11 hours ago [-]
AFAIK, because of protectionism (even pre Trump), US solar is much more expensive than elsewhere.
FpUser 6 hours ago [-]
>"good intentions being squandered"
Relying on tax credits and otherwise "optimizing" tax payments and "good intentions" do not sleep well together in my opinion.
toomuchtodo 6 hours ago [-]
"Gambler attempts to convert lottery ticket winnings into clean energy to minimize taxes." is fine imho. It didn't work out, but if it had, the outcome would've been "good" and he still learned a lesson and shared with the rest of us. No different than a failed startup. You win or you learn.
FpUser 6 hours ago [-]
Oh, I am in no way judging them personally. Just do not bring that "we are doing it for the humanity" BS into what is in an essence a pure gamble.
Calwestjobs 22 hours ago [-]
yes, but... if youre manufacturing plant with expected electricity usage, then build solar plant next / close to your manufacturing facility. or municipality or water treatment plant or .... build solar plant because you need electricity, do not build solar plant because you need money. same as with agriculture, it is nonprofit endevour, you are not getting rich from corn, you are rich from corn sirup, from tortillas... ( unless you are bill gates and divert tax breaks / subsidies away from agriculture and put them into your wallet instead, worsening situation forr every person inside of US borders )
solo solar plant are very weird edge case which was viable only because people with 20 years of schooling could not understand why is solar important, (after multiple oil crises ) so govs invested in this nonsense to speed up adoption. not because it was sensical thing. to open eyes to people that solar is working.
build solar as part of your corps supply chain. dollars are not goal, dollars are means for better life, stronger communities, better republic.
"Failure of the state to prioritize energy sufficiency over hypothetical mineral rights. "
where is battery ? so no this is not about energy self sufficiency, this is just pure only money endeavor. soft power here is not sane. also with battery you can get order of magnitude higher profit AND higher UTILITY, so there are multiple bad things in that endeavor.
jay_kyburz 20 hours ago [-]
The same goes for household solar. You don't put it on the roof because you think you'll make money from feed in tariffs, you do it to reduce your electricity bill.
People here in Australia expect feed in tariff to drop to nothing in the next few years, but electric prices are still climbing.
Our new government has promised battery subsidies as well, so I expect batteries to take off. There is a lot of money to be saved by time shifting all that sun that is wasted during the day until the evening when you get home.
Calwestjobs 21 hours ago [-]
or let me say it differently, my house needs as much energy to make it luxuriously comfortable in coldest of days, as my neighbors house loses just thru chimney, when there is no fire burning... ( he needs 50times more energy then me, but he is not comfortable, he wakes up into cold house )
there is insanely huge gap in peoples perception of reality, schooling failed many.
less energy i need, less energy we need to capture (new word for generate), transmit, curtail, store,.... my heat pump is smaller then heat pump in costcos meat refrigerator, so smaller device is easier, quicker to manufacture, less people, cars , cubic feet to store, transport,.... and all this effect from on freaking house.
or hurricane, tornado, flood disables grid in my area, my house will stay livable for 3 days until i have to put on sweater... or today, there is heat wave predicted, at least 10 people will die today,... why?
Spivak 20 hours ago [-]
I'm so confused by the chimney thing, a nice wood stove which I assume your neighbor is using because it's not practical or possible to heat your house with a fireplace can get you 70-80% efficiency and run overnight. They burn clean enough that I can't tell when my neighbors (presumably always) use theirs and they're directly across the street. The whole neighborhood knows when I use my fireplace.
My neighbors who heat their houses with wood (in an area where you absolutely don't have to—we have gas and electric at extremely reasonable prices), both have the nice high efficiency stoves to take advantage of the Biden tax credit and it seems to work just fine for them. Cords of wood around here aren't free but damn close to it.
Source: I'm considering a wood stove for my garage for working in the winter and they both talked my ear off about their experiences.
jeffbee 21 hours ago [-]
[flagged]
stevenzzzzzzz 20 hours ago [-]
Many people even working in power/energy don't realize how much interconnection costs are a hinderance. Example: see study group DISIS-2021-001 in SPP (a grid region similar to ERCOT/Texas), a good 25 % of the planned capacity was hit with an interconnection cost approx > $300k/MW (which is similar to the cost of the OP).
Predictably, all of those projects dropped out of the interconnection queue / process
Quick summary: Author had money "from crypto" and wanted to create a solar power plant in Texas. After dealing with challenging mineral rights and health issues, interconnect fees to the power company were too expensive to make the project worth it.
nine_k 16 hours ago [-]
The missing flavor: Texas mineral rights are very bizarre (they dominate surface land rights, and there's no state registry of them), the detailed power grid analysis completely contradicted the preliminary analysis, and the costs of upgrading less than 2 miles of wiring to carry 3 MW is nearly $800k.
I'm used to think that California is an overpriced legal quagmire if you want to build something. I didn't expect Texas to fare not much better.
bri3k 21 hours ago [-]
Don't forget in the middle he states that this is a tax dodge on capital gains from said crypto money.
giblfiz 18 hours ago [-]
I'm the original author.
I'm not sure why you got down-voted for this, this was absolutely a "tax dodge". The polite term is "tax mitigation strategy", I'm also not sure why this is seen as an openly negative thing?
The government wants a type of thing done, they say "hey, we won't pay people directly to do it, but we will subsidize it thru tax incentives"
I was like "yeah, I like that thing (solar) and think it's good for the world, I will do it in return for tax incentives"
Why exactly is that bad?
xboxnolifes 6 hours ago [-]
Idk, there's a certain double standard that I see semi-frequently. Direct subsidies and/or rebates to incentivize renewable energy? Good. Tax subsidies to do the exact same thing? Awful, terrible, tax avoiding scum.
Sometimes I wonder if any of the people who complain about this bought an electric car or roof solar with tax credits or rebates.
Or maybe its just HN anti-crypto bias.
micromacrofoot 9 hours ago [-]
because there's not necessarily a demand for this site, or even a personal interest — imo this sort of incentive produces worse outcomes than taxing people and farming it out to the lowest bidder, at least the lowest bidder has a business and reputation to maintain (thin, but not nothing)
jeffrallen 7 hours ago [-]
> Why exactly is that bad?
Because you could have just paid your taxes like the rest of us have to. Instead you made a big drama and are asking us to agree with you how unfair it all is that you have to pay taxes.
zekrioca 5 hours ago [-]
What a nonsense. This is the government itself proposing the subsidie to build up long term renewables, which have a much more important role to local communities. Author then writes about their important experiences, listing important lessons and insights for future endeavours, and you call it a ‘drama’.
Tell me about your intentions without telling me about your intentions.
Dylan16807 21 hours ago [-]
In the same way that any business expansion is a tax dodge, sure.
chairmansteve 10 hours ago [-]
Not true. If you read the article, arguably his main motivation was to avoid taxes.
Not that I blame him. The lesson is though, never do anything just to avoid taxes. He would never have got into the solar business without the tax "opportunities".
bri3k 20 hours ago [-]
He started out to find ways to lower his tax burden. Found something with solar infrastructure in a different state. Went ahead with it in spite of having no experience with the local laws or infrastructure projects and wondered why it failed?
Dylan16807 20 hours ago [-]
I'm not shocked that it failed. But taking money that would have been profit and turning it into company creation/expansion is something that is taxed lower for a reason.
Retric 19 hours ago [-]
> for a reason.
Yea, corruption. Tax breaks on past gains are just handouts and everyone wants a handout.
Dylan16807 19 hours ago [-]
> past gains
To focus on "past": I don't think deferring the gains for a couple years is a big deal. It's not a handout because he'll still be paying the same taxes if he doesn't end up reinvesting the money. It just offers him some more time to set up a business, instead of having to do it same-year.
To focus on "gains": If you don't like the entire idea of reinvested money not counting as profits, oh boy that's a big objection, and it's not that way because of corruption.
Retric 19 hours ago [-]
Sign me up for some interest free loans then. Deferring capital gains is a huge windfall.
Reinvesting money getting special treatment provides zero benefits to the economy. It falls under the fallacy that rich people can avoid investing their fortunes, inflation already makes that a nonstarter. The only result here is a handout.
AnthonyMouse 18 hours ago [-]
Business expenses are tax deductions because business taxes are on profits and profits are calculated as revenue minus expenses.
Taxing businesses on revenue rather than profits doesn't work because it would bankrupt every business with slim margins, which is most of them, while effectively cutting taxes for the ones with the thickest margins and creating a massive tax subsidy for vertical integration.
> It falls under the fallacy that rich people can avoid investing their fortunes, inflation already makes that a nonstarter.
If all someone cared about was avoiding inflation they could just buy a stack of precious metals. Moreover, the return from typical passive investments (e.g. S&P 500) significantly exceeds the rate of inflation.
The preference for investment is as opposed to spending. If inflation is at 3% and someone is getting a 10% return from stocks, they can avoid real value loss while still spending up to 70% of the nominal profits. But we'd rather people build factories and develop new drugs and technologies than buy second private jets and third personal mansions.
Retric 18 hours ago [-]
> Business expenses
Investment isn’t a business expense.
> If all someone cared about was avoiding inflation they could just buy a stack of precious metals.
Capital gains of precious metals “yield” drops you below inflation.
> But we'd rather people build factories and develop new drugs and technologies than buy second private jets and third personal mansions.
Someone needs to do that for your hypothetical 10% S&P gains. Giving handouts to wealthy people hardly discourages them using a private jet, just the opposite.
AnthonyMouse 18 hours ago [-]
> Investment isn’t a business expense.
Investment is the thing where you pay a business expense today expecting a return in the future.
> Capital gains of precious metals “yield” drops you below inflation.
This is a defect in the tax code. Taxing inflation as a capital gain is ridiculous.
> Someone needs to do that for your hypothetical 10% S&P gains.
And then those companies get a tax deduction. Or in many cases they do make those returns without doing those things, because a lot of those companies have high returns by buying off regulators to constrain competition and then charging high margins to captive customers, which is another thing we don't like to promote over the ones actually making productive investments.
> Giving handouts to wealthy people hardly discourages them using a private jet, just the opposite.
The tax isn't deferred on the money used for personal consumption.
Retric 17 hours ago [-]
> Investment is the thing where you pay a business expense today expecting a return in the future.
Investments like land aren’t necessarily consumed. You can reasonably deduct when an actual expense happens, but buying steel etc to be used next year doesn’t guarantee it is actually used rather than sold.
> Taxing inflation as a capital gain is ridiculous.
It’s a useful feature to discourage the exact wasteful approach you proposed.
> The tax isn't deferred on the money used for personal consumption.
Money is fungible, you hand me money to buy land and I can redirect money I would have spent to buy something else.
AnthonyMouse 17 hours ago [-]
> Investments like land aren’t necessarily consumed. You can reasonably deduct when an actual expense happens, but buying steel etc to be used next year doesn’t guarantee it is actually used rather than sold.
In many cases you're buying something intending it to be consumed, even if it hasn't been yet, and have to buy it ahead of time because you have to get it installed or connected or forged etc. before it can start being used.
If you then sell the steel instead of using it, the sale price gets added to your income and the cost was already deducted previously, so that cancels the previous deduction and you're back to paying the tax on it.
> Money is fungible, you hand me money to buy land and I can redirect money I would have spent to buy something else.
In order to get a tax deduction for buying land to build a solar farm, you have to buy land to build a solar farm. You can't spend that money on something else and still get that tax deduction. You can spend other money on something else, but the amount of money you have available to spend on other things has gone down, and the point is to increase your incentive to build the solar farm, which it is effective in doing.
Retric 17 hours ago [-]
> If you then sell the steel instead of using it, the sale price gets added to your income and the cost was already deducted previously, so that cancels the previous deduction and you're back to paying the tax on it.
An interest free loan means you’re ahead in that transaction but society is worse off when people do useless things to avoid taxes.
> You can spend other money on something else, but the amount of money you have available to spend on other things has gone down
One can’t invest all their money in any given year or one lacks the ability to buy food. You also can’t spend all your money in a given year or you go broke.
Thus both saving and spending are always happening and the government reducing the amount of money you’re required to save means you can up spending. There’s zero meaningfully differences between piles of money here.
AnthonyMouse 16 hours ago [-]
> An interest free loans means you’re ahead in that transaction.
Except that you had to sit on some asset in the meantime instead of using it for something. Or if that asset was a productive investment that yielded returns, the government is ahead in that transaction, because the returns from investing the deferred taxes increase your taxable income.
> One can’t invest all their money in any given year or one lacks the ability to buy food. You also can’t spend all your money in a given year or you go broke.
You can both invest all of your assets by taking on new debt to buy food and spend all of your assets and have nothing left. Both of those are things some people actually do. And for people who neither spend nor invest 100% of their assets, different incentives will affect the proportion of each one they do.
> Thus both saving and spending are happening and reducing the amount of money required to save means you can up spending.
Suppose you're paying a tax rate of 33% and have access to investments with a 10% return. If you have to pay the tax when you get the money then if you get $100 you immediately lose $33 and can only invest $67, and if you get 10% interest on the $67 then you can only reinvest $4.49. In other words, your compounding rate is now 6.7% instead of 10% and after 10 years you'd have $128.
If instead you pay the tax when you spend the money, your compounding rate is 10%. So if you started off with $100, after 10 years you have $259 before tax and then you pay a third of that in tax and get to spend $174.
So in one case you have the choice between spending $67 today or $128 in ten years, in the other case your choice is between spending $67 today or $174 in ten years. That increases the incentive to invest the money now and spend more of it later, instead of spending it now.
You do then get to spend more of it later, but the extra money you get to spend is value that only exists because of the additional investment.
And then the government gets $85 in taxes in 10 years instead of $33 today, i.e. it got a 10% ROI too.
Retric 16 hours ago [-]
> Except you had
No, you benefited from sitting on that productive asset. Getting a free stock option is still a meaningful benefit even if you never case it in.
Further assuming the asset kept up with inflation you’re better off after the sale vs holding cash for that same period.
> by taking on new debt to buy food
The money you got from that loan is an asset you’re not investing in that hypothetical. As to “spend all of your assets and have nothing left” yes I mentioned going broke was an option repeating what I already said isn’t an argument here.
> Suppose you …
Ignoring the possibility to just spend more today and also spend the same amount in 10 years is disingenuous here. Especially as assuming consistent rules you also benefit 10 years from now, so you get to spend more today and also spend more in 10 years.
Really free money lets you spend more, there’s no way around that. Further with the US tax code nothing says investments need to be in the US or capital gains ever get taxed this often is a pure dead loss for US taxpayer.
AnthonyMouse 15 hours ago [-]
> No, you benefited from sitting on that productive asset. Getting a free stock option is still a meaningful benefit even if you never case it in.
If you buy a ton of steel with no intention of ever doing anything other than selling it for the same value as you paid for it in a while, you haven't benefited from it and have in fact cost yourself value in opportunity cost because other investments return more than that.
If you get a free stock option and then there is a 30% chance it turns out to be worth something, the government benefits from the same 30% chance that you'll get money from it which will then be taxable income.
> The money you got from that loan is an asset you’re not investing in that hypothetical.
Loan principal doesn't create net assets. You get new money and new debt at the same time and they cancel.
> As to “spend all of your assets and have nothing left” yes I mentioned going broke was an option repeating what I already said isn’t an argument here.
I took your implication to be that it was something bad and so nobody would purposely do that. But people purposely do it all the time. They have some money and then choose to spend all of it instead of investing any of it.
> Ignoring the possibility to just spend more today and also spend the same amount in 10 years is disingenuous here.
Even that scenario still requires the amount of investment to increase. What you'd be doing is spending some but not all of the taxes deferred on the amount you initially invested, e.g. instead of spending $33 and investing $33 you invest $37 and spend $42, and you had ~$12 extra because of the taxes deferred on the $37. But now you're investing $37 instead of $33, and that's the minimum you could invest to get the same after-tax amount in ten years because now you haven't paid the taxes yet.
Doing that is also more disfavored because you get better returns from diverting more money to investment but the benefits of immediate spending haven't increased.
Retric 10 hours ago [-]
> If you buy a ton of steel with no intention of ever doing anything other than selling it for the same value as you paid for it in a while, you haven't benefited from it and have in fact cost yourself value in opportunity cost because other investments return more than that.
Your argument was buying a productive asset useful for the business. My argument is that’s a prediction which may be false, you suggesting no they are just randomly buying steel is losing your argument upfront.
> Loan principal doesn't create net assets. You get new money and new debt at the same time and they cancel.
Leverage is based on loans generating assets that can be invested. It’s clear your not actually arguing in good faith.
nine_k 16 hours ago [-]
Not "a tax dodge", but "following the tax incentives".
kortilla 21 hours ago [-]
Investing money isn’t a tax dodge
baking 20 hours ago [-]
The taxes were for capital gains on his crypto assets, which is not an investment but pure speculation. The tax dodge was to find an actual investment with tax credits that would cover the capital gains on his speculation.
nick238 22 hours ago [-]
So with mineral rights in Texas, could you just buy/lease them out from under one of your rivals/enemies and just bulldoze their buildings for the lulz? "Sorry, I just really needed that teaspoon of dirt from under your multimillion dollar factory". I guess that's the whole idea of the insurance/waivers, so do you need 50% of the owners of the rights to agree?
Also, I heard that Texas was the best place to build things (cf. Abundance by Thompson & Klein)
oezi 12 hours ago [-]
Well you need to find something to exercise the rights I would assume.
He couldn't get insurance without a waiver. He couldn't get a mortgage without insurance. So he didn't want to invest his own cash exclusively.
jeffbee 21 hours ago [-]
This is not only Texas. It is everywhere. It is why "real estate" is a descriptive term that exists.
abetusk 4 hours ago [-]
Aside from all the turbulence of trying to get a project off the ground, the deciding factor was that the electrical transport infrastructure (aka wires) couldn't support the desired load of 4.5MW-10MW and was slashed to 3MW, making the project inviable?
To me, the "obvious" solution is to create solar plants closer to their use and lay down new infrastructure. From my understanding, one of the major reasons to have power plants so far away from urban centers is because they were dirty or location locked (waterfalls, etc.). With solar, this need essentially goes away with the ability now to put solar plants essentially in the middle, or directly adjacent, to urban centers.
Could someone enlighten me as to why this is not feasible or if someone is already discussing this idea?
nasmorn 4 hours ago [-]
Urban land is expensive.
kragen 20 hours ago [-]
This is a much better read than I expected. Normally I'd insert a diatribe here about the US's anti-renewable-energy regulatory regime, but the author tells the story far more persuasively and compellingly than I could ever hope to.
travisgriggs 21 hours ago [-]
Every time I learn something new about Texas, I like Texas less.
At least Dr Pepper comes from Texas. There’s that to like. Everything else just always seems upside down absurd.
bz_bz_bz 3 hours ago [-]
I'm curious what part of this you thought was an indictment on Texas.
ERCOT has the most generator-friendly interconnection process in the nation and leads the country in both renewable generation and utility-scale solar installations.
Mineral rights are dominant over surface rights in most jurisdictions, including other states like California. To call it "insane" just shows how little experience Mr. R has in land development.
OP lost the game playing on easy mode because he was purely chasing tax breaks with zero experience. The area OP is trying to develop in is a QOZ for a reason; he should have expected there to be upgrades necessary to delivery that level of power to a substation in an area where nothing else is going on.
OP is actually lucky that this project failed. Expecting to get the ISO-average solar PPA price for a project in Coleman County is nuts. This solar farm would have lost even more money had he continued.
spauldo 19 hours ago [-]
Try driving in Texas sometime. Roads are decent, speed limits are high, but the other drivers will make you borderline homicidal.
Lots of seemingly little things that are necessary to get something off the ground.
pshirshov 8 hours ago [-]
Why to shut it down instead of opening an aluminum refinery or running any other industrial process with high energy requirements?
codingbot3000 5 hours ago [-]
I am always wondering why the US scores so well on these "ease of doing business" rankings???
Even taking into account that this was a risky business idea, relying on subsidies etc., both property and interconnection to me seem like areas where the legislation could be clear and predictable. Adding in the ever-present risk of litigation in the US, I wonder if my stock portfolio is maybe a bit too reliant on this market.
holowoodman 2 hours ago [-]
Well, let me tell you (from some experience) how this would have gone in good old Germany:
No mineral rights like Texas, except for the occasional lignite open-pit mining, but that is very limited to certain regions. And even then, you'd be reimbursed handsomely for your troubles and the torn down equipment and land.
Grid connection would have been easier, because the electricity company is required to provide timely and cheap connections to the next sufficient connection point. However, there are exceptions, if they can prove that they cannot get contractors, so you have to wait some time, usually two to three years after you sign the contract for the connection.
Before connection contract signing, you need to enter an auction for the price of the power you will be providing. Fixed for 20 years. However, those 20 years start at signature, so the first 2 to 3 are wasted because of no connection. And you are competing with tons of other solar installations, so you can't really predict your profits when planning. Btw. they can even fail to connect you after you already built your plant for the same reason, so you may either wait or risk it...
Then you have to get approval from the local planning bureau. For that you need a number of assessments: You need to prove that there is no environmental impact, e.g. on rare species of vermin and weeds, no impact on nearby population e.g. through noise, reflection, or other annoyances. Then you have to get approval for the land-use change, because usually you are building on land zoned agrarian use, that has to be changed (and usually can never be changed back, so the land is worthless afterwards even if you don't actually build). You have to get approval from various environmental protection agencies that certify you are not in any kind of protected zone, or if you are (half of Germany is), then you are not affecting anything important (which is a 50/50 chance). Then your plans have to be submitted for public review, where local groups of busybodies, can enter their objections. If there are objections, the approval can be delayed or denied. You can of course "bribe" the public with a few well-placed donations to local groups, or by declaring your enterprise to be open to local investment for which you then sell shares and hand our corresponding parts of your profits. This of course necessitates a change in legal form, which of course needs another few rounds with lawyers, tax advisors, the tax office and a whole lot of due diligence because you are now handing out shares to small investors, which is kind of protected and therefore complicated...
Believe me, the OP's story is very harmless compared to what this would take here, even though the above is the simplified process after a few rounds of laws that were intended to accelerate building green energy.
P.S.: You need a fence and cameras. First because no insurance will allow it without the fence, some idiot kid could climb a panel and fall. Second because there are professional solar panel thieves around here, stealing them at night by the truckload.
compiler_queen 7 hours ago [-]
Zero sympathy from this quarter - what started as a tax dodge to, let's face it, defund schools, hospitals and social security, ended up as a "poor me" self-effacing blog post.
N_Lens 7 hours ago [-]
Actually I believe the money you're talking about is being used to bomb many places on the planet.
mattnewton 4 hours ago [-]
tax incentives to create solar infrastructure are designed to create solar infrastructure, I don't understand why it's being described as a pejorative "tax dodge" when the government directs funds this way rather than takes the money directly and buys those things.
cauch 6 minutes ago [-]
I guess tax incentives feel strange because it feels a bit like a thing the government needs to do because of bad behaviors.
As you say, the situation would be 100% identical if the government was receiving directly the tax and then buying these things directly. So why don't they do that? Because people with money will find ways to dodge taxes anyway. Tax incentives is basically admitting that people with money are selfish and cheaters, and that we need to "play their game" to achieve what they should normally and ethically do if they were not detrimental to society.
Interestingly enough, if the person would have paid their taxes normally and that this money would have been used for a government project, then the probability of success would have been higher (I know some government projects are really mismanaged, but so was this one anyway), because the government would have been in better position to 1) get experts opinions/supports, 2) understand the rules and regulations, 3) synchronize different projects for a better complementarity.
joeblubaugh 21 hours ago [-]
It’s too bad that Texas’ joke of an electrical grid defeated the project, but I think private profit on energy generation is really unlikely and produces a lot of bad incentives for plant operators.
In California the companies also systematically under-invest in capacity and maintenance, so the up-front cost of any project, even single home solar can get unpredictable fast.
gwern 20 hours ago [-]
One of the problems with undisclosed and thoughtless use of LLMs for writing, like ChatGPT in this case, is that it undermines trust.
Take the many quotes in this article, which all sound like ChatGPT. Obviously, none of those people said those words, or even anything all that like what they supposedly said, because that's not what real people sound like.
If the author is willing to silently do that (which could be uncharitably described as "lying"), why should I trust anything else, like the numbers, or the factual claims?
Did any of this actually happen? (I note that there's not a single external link or fact that an ignorant layman like myself could quickly and easily verify, including the Astral Codex Ten part.)
Hi Gwern,
I'm the owner of 7goldfish, the developer in question, and a fan of yours via reputation and the occasional comment I run into on Reddit.
First I want to acknowledge that draft one of this was LLM written, by Claude, though it reflects a pretty detailed outline of an experience pretty accurately. As you point out the quotes from both Mr. R and myself were also mostly spat out by the LLM as well (though not the quotes from external entities)
Mr. R signed off on the draft before posting, and well, it was me. I tended to think of it more as a "movie treatment" than a technical post-mortem, so I wasn't really worried about it. I also was only expecting this to get circulated within my own small/medium sized community so, in general, wasn't really worried about it.
That said, I definitely love using LLMs to write. To be perfectly honest they write considerably better and faster than I do (as you noted, lots of typo-o's and similar. I was still spelling at a 6th grade level when I graduated from Uni with CS degree), though I still feel like I have both ideas and experiences worth sharing. If you click any of the earlier stuff you will probably see the clumsy results that take about 10x the time.
I waffle on the idea of how much disclaimer of "written via LLM, but with multiple revisions and actual thought" vs "just don't bother saying anything" it's worth including. I'm curious if you consider having a ghost writer to be lying, or a cinematic re-enactment. I notice as I say that that it sounds defensive, and I want it to be a genuine question, as I share your concern about living in a media world where it feels like "basically nothing can be trusted".
For what it's worth, the numbers should be about right, though there is only so much energy we were willing to spend on the post-mortem. If there is some informational reason you would like to get into it deeply I would be happy to share the post mortem docs privately.
gwern 4 hours ago [-]
I think writing fiction with LLMs is fine. "based on a true story" or roman à clef fiction is also fine. I would have no objection to this if it were clearer that this was a "movie treatment". (As LLM fiction goes, this isn't even all that bad.)
However... Look at this HN page! Not a single person here realized (before my still-downvoted comment) that this was a 'movie treatment', or that the 'quotes...were also mostly spat out by the LLM as well'. They all are taking it as 100% gospel, and engaging with it in good faith, as if it were genuinely a 'technical post-mortem' (as it takes pains to present itself) instead of your fiction-writing hobby,
Just make it clearer that this is a fictional story.
> I'm curious if you consider having a ghost writer to be lying, or a cinematic re-enactment
Yes. This is why ghost writers are supposed to be credited as such if they are contributing non-trivial content rather than simply serving as a amanuensis or an editor, and cinematic re-enactments are flagged as such if it wouldn't be obvious to a reasonable person (by reputable documentarians, anyway).
I'd expect ChatGPT to make no typographical errors in a list of post titles.
ur-whale 20 hours ago [-]
If the interconnection costs were such a headache, why didn't he convert the solar farm to produce electricity consumed only locally to mine Bitcoin?
giblfiz 17 hours ago [-]
Hey, I'm the original author here.
I didn't want to do BTC for two reasons:
1) I'm already WAY over exposed on crypto in my portfolio
2) I consider energy burn on mining to be part of a "zero sum helps no one" situation. I was trying to actually do something net positive for the world so didn't want to just drop more into that bucket.
zekrioca 4 hours ago [-]
As for (2), there are so many other ways to exploit that electricity. Mining Bitcoin isn’t the only way. But I agree, you should have considered batteries, and more flexible loads into your calculations as to how to be profitable. 3MWh is considerable for many usecases.
drewm1980 12 hours ago [-]
It's good that you repented and at least tried to do something good with the money, but it would have been even better to donate it to an environmental organization with better judgement than you have. Proof of work crypto mining was an inexcusably bad idea for humanity from day one.
ur-whale 15 hours ago [-]
Hey, sorry to hear about the predicament, when business collides with insane regulations, it's a very frustrating thing to be caught in.
number 2, btc mining environmental impact, I generally disagree,but I can understand the argument, however ...
number 1, the crypto exposure aspect
a) what prevents your from selling the BTC the moment you mine them to pay for OPEX, and then invest what is leftover in tradfi?
b) While many on this site will violently and deeply disagree in spite of being proven wrong over and over and over again (the definition of insanity, etc...), I'd argue that being "over-exposed to BTC" over the last 15 years has not exactly been a bad thing if you can stomach the volatility.
And I'm very sorry to hear S'pore wasn't good to you, this is one of my very favourite place on Earth (in particular the food).
AtlasBarfed 22 hours ago [-]
Sounds like you need to bribe some people. It is Texas
I'm sorry. Did I say bribe? I of course meant campaign donation?
giblfiz 17 hours ago [-]
Original author here,
If you look a little more carefully the thing that killed us was an actual physical infrastructure problem. Mineral rights were a nightmare, but we were humping our way thru it bit by bit.
Interconnection was limited because the wires they thought were in the ground were not what was actually there. (well, had degraded)
This was more of a "atoms are hard" kind of issue.
dhosek 20 hours ago [-]
If you give them the money after they do the favor, it’s legal, the supreme court said so. Plus, apparently trump feels that bribing foreign officials is essential to American competitiveness so FCPA is going unenforced. Welcome to the future.
Calwestjobs 22 hours ago [-]
capital in capitalism.
photochemsyn 5 hours ago [-]
If you analyze the effects of doubling solar generation once in the United States on natural gas demand, then analyze the effect of another doubling, then it becomes clear why there isn't the kind of nationwide infrastructure, tax and regulatory support for expanding solar across the USA that exists in countries that have to import natural gas, eg China, Japan, Germany etc.
Natural gas just has more resources to buy politicians in the USA than solar does, that's the nature of the problem. Maybe the investor in this story should have spent have his crypto fortune on buying Texas politicians before even beginning this project - but buying off a lot of politicians is expensive, it's more the province of billionaires than of millionaires.
buckle8017 22 hours ago [-]
Ah yes the age old story of a rich guy without a clue diving into a new industry and failing.
They should be requiring batteries with solar as well.
His install would have a net negative value to the Texas grid without it.
hwillis 20 hours ago [-]
> His install would have a net negative value to the Texas grid without it.
Absolutely untrue. Solar and wind can always just be disconnected at any moment. Wind resources are also a huge inertia source- windmill blades are massive grid stabilizers.
Renewable tech does not have a big coal fire they need to keep at a constant temperature. How about instead of requiring batteries with solar, we require coal plants to have sufficient bypass cooling that they don't need the load of a grid connection to stay cool.
Renewables are a boogeyman. The reality is simply that they are always able to undercut any fossil plant and they don't like that. It has fuck all to do with grid stability.
2 hours ago [-]
zekrioca 4 hours ago [-]
Batteries are very important to reliability, but not the only way to exploit solar. Not all loads are the way you think they are. And it wouldn’t have a net negative value to the grid (it is literally free energy, I am always shocked as to why this is so hard to understand) because the grid can always curtail it if it impacts grid’s reliability, or if it increases transmissions costs beyond a certain threshold which they have already calculated (as a good legalised monopoly that they are).
You are propagating some decades old ideas which don’t hold anymore.
giblfiz 17 hours ago [-]
Hey, original author here.
> Ah yes the age old story of a rich guy without a clue diving into a new industry and failing.
Yep, very much so. I was well aware that I didn't have a clue, and thought that I could make up for that with professional expert advice, elbow grease, a pretty good combination of tax advantages, and a willingness to learn.
The project was intentionally limited in scale as to be a "learning project" for me and the whole team. I'm also sort of ok with the idea that it failed, though super frustrated with the entire underlying incentive structure changing so much that we can't use anything we learned to try a second time.
Batteries were intentionally excluded because of the additional complexity overhead they added, and because the way the interconnection rules are written it would have put us into a different MW class which would have dramatically increased a number of other bureaucracy issues.
You are ABSOLUTELY INCORRECT that we would have had a net negative value to the Texas grid without batteries. Batteries are valuable, and increasingly so, but so is raw power (even at mid sun). This is reflected nicely in the hourly price charts, which at this point I'm super familiar with.
Dylan16807 21 hours ago [-]
> Ah yes the age old story of a rich guy without a clue diving into a new industry and failing.
It's a significantly bad thing if something as straightforward as buying and plugging in solar panels requires special knowledge to not get screwed over.
> His install would have a net negative value to the Texas grid without it.
Oh come on.
kragen 20 hours ago [-]
Electrical generation is a competitive market. It's the expected and even desirable outcome that only the most efficient producers will remain profitable. You're not just plugging in solar panels; you're competing with other companies to see who can plug in the solar panels more cheaply.
And it's even plausible that ERCOT currently can't handle additional PV in whatever area the Roby parcel was in without adding BESS, although the person you're responding to has no idea if that's true or not, since neither they nor I knows where that is.
The conclusion in the post:
> Run five projects through the process simultaneously. Most will fail for reasons you cannot predict. With five, one might succeed. And switching to batteries instead of solar. Or at least solar plus storage.
Dylan16807 20 hours ago [-]
I didn't even say profitable. He can't get the ability to just hook up all the panels.
kragen 20 hours ago [-]
He did get that ability. They just won't let him produce over 3 megawatts, making the plant unprofitable. It's a total clusterfuck.
Dylan16807 20 hours ago [-]
That's a really pedantic answer. He can't properly hook up the panels.
kragen 19 hours ago [-]
That's a simply incorrect answer. BESS, simple curtailment at peak hours, or angle diversity would solve the problem. If he'd known the problem was coming 18 months ago, it wouldn't be a problem.
Dylan16807 19 hours ago [-]
> That's a simply incorrect answer.
Okay, how small of a connection would they have to restrict him to for me to be correct?
> BESS, simple curtailment at peak hours, or angle diversity would solve the problem.
That much extra curtailment is a major problem. That much extra angle diversity hurts output. Batteries are a workaround for not being able to properly hook up the panels.
kragen 19 hours ago [-]
You'll have to do your own calculations based on your own site data.
Onsite BESS permits you to not only get by with a smaller hookup but also sell your energy at times when people are willing to pay for it.
Dylan16807 19 hours ago [-]
> You'll have to do your own calculations based on your own site data.
I did my calculation already. It said that a 1/3 drop in hookup for panels that were already hookup-constrained is not a proper hookup.
Straightforward math.
kragen 18 hours ago [-]
You're leaving out most of the relevant factors, presumably because you don't know them.
Dylan16807 17 hours ago [-]
So are you.
baking 20 hours ago [-]
> Oh come on.
He was doing it for the tax credits. Without the tax credits, this project wouldn't have come close to making sense.
Dylan16807 20 hours ago [-]
The tax credits aren't coming out of the grid somewhere else. The project is a negative to tax revenue, positive to the grid, and positive to CO2 levels.
baking 18 hours ago [-]
He's using the tax credits to undersell projects with storage that would have been more positive for the grid. Solar without storage in Texas is coal to Newcastle. Subsidizing bare-bones solar is not good for the grid.
Dylan16807 17 hours ago [-]
Projects with storage can take advantage of the cheaper solar power by shifting their balance, installing fewer panels and more storage. This leaves the grid better off overall.
baking 6 hours ago [-]
Projects with storage can also take advantage of lower grid connection power limits because they are not forced to dump maximum power at peak supply times of the day.
zekrioca 4 hours ago [-]
Because they don’t want to upgrade the grid, don’t want to compromise even in flexible cases, and want to keep everything as is.
giblfiz 17 hours ago [-]
Battery and and solar with battery have (nearly) the same tax credit advantage.
Essentially, we were replicating the process that the ISOs used internally. The users of this product were all former ISO employees. The goal was to speed up the process of determining whether transmission costs were going to ruin a project before any money was spent. ISOs take months to do their analysis. The users told me that they were usually looking for $0 transmission upgrades on $50m+ projects.
The grid and contingency files from the ISOs were under confidentiality agreements. This rubbed me the wrong way from a competition point of view. We also had data about projects slated to be built which could take away capacity from our projects.
I could see a SaaS in doing this sort of analysis. It's probably bureaucratic between reselling TARA, NDAs, and maybe legal issues if the analysis was wrong. I have doubts about the market, most of the money is in big projects at big companies that are already doing this sort of thing.
[1] https://www.siemens.com/global/en/products/energy/grid-softw...
[2] https://power-gem.co/software/tara-software/
It's a thorny issue and something I ponder in my day-to-day[0]. We're members in ISOs where it makes sense, and can provide CEII data once we've confirmed customers already have access, but I would love to be able to show some of it publicly. It's also odd how things vary from market to market. Transmission outages: public everywhere, except ERCOT, where they're considered Secure. Generator bids: anonymized and delayed by up to 90 days everywhere, except ERCOT, where it's 60-days and not anonymized at all (yes, ERCOT is different wrt to FERC jurisdiction).
Years ago I worked at a market monitor[1], and we got everything, just cloning the changes to ISO databases overnight every day, second-by-second PI (plant information) data, it was awesome. The potential advantages from data asymmetry are big enough that there are multiple companies with physical sensors out in the world measuring power lines in different ways to try and reconstruct grid activity in real time, and then others doing it entirely from access to CEII and a deep understanding of how the grid function. But all of this is heavily oriented towards traders, not developers, although I would use trading tools when developing projects because they were the most advanced.
[0] https://www.gridstatus.io/live
[1] https://potomaceconomics.com/
All of this results in good intentions being squandered because too many entrenched entities would lose too much hypothetical value on a balance sheet to just do something better for everyone.
Is there any actual need for this Solar Farm in the middle of nowhere (that was only built there because of a tax scheme)? Are Texas ratepayers meant to cover the cost of the interconnect in their $/Kwh instead of him?
Better to just pay his taxes and move on, and leave the subsidies for an actual useful solar project.
EDIT: Oh and mineral rights are basically the original cryptocurrency/memecoin, so its somewhat funny that they came into play
The extra costs and limits are ostensibly because of safety. Yes, I know that engineers can game the system, but they're listing real reasons why the plant should shoulder the costs to the larger grid.
- He didn't consult with somebody who had any experience in planning such a project, but a person who - while maybe personally impressive - had zero experience and started by writing scripts to find suitable properties. Isn't the project already doomed at this point? You are looking to invest 7m USD, who will you consult for this?
- He wouldn't do the project unless he was able to get insurance for it. The whole issue of exploring and acquiring mineral rights was just to get insurance for the project. Why not forego insurance? EDIT: Okay, needed insurance for financing the project. I assumed the project would be financed through the crypto gains.
- From ballpark numbers his projected cost of 1,37 USD per Watt DC seems very high (~2 USD per Watt Peak AC). In Europe large scale PV has reached 600 EUR / kWp so building a 4.5 MWp plant should cost more like 3m USD rather than his projected 9m USD. Of course 4.5 MW is small (10000 panels) so this might be part of the issue.
Relying on tax credits and otherwise "optimizing" tax payments and "good intentions" do not sleep well together in my opinion.
solo solar plant are very weird edge case which was viable only because people with 20 years of schooling could not understand why is solar important, (after multiple oil crises ) so govs invested in this nonsense to speed up adoption. not because it was sensical thing. to open eyes to people that solar is working.
build solar as part of your corps supply chain. dollars are not goal, dollars are means for better life, stronger communities, better republic.
"Failure of the state to prioritize energy sufficiency over hypothetical mineral rights. "
where is battery ? so no this is not about energy self sufficiency, this is just pure only money endeavor. soft power here is not sane. also with battery you can get order of magnitude higher profit AND higher UTILITY, so there are multiple bad things in that endeavor.
People here in Australia expect feed in tariff to drop to nothing in the next few years, but electric prices are still climbing.
Our new government has promised battery subsidies as well, so I expect batteries to take off. There is a lot of money to be saved by time shifting all that sun that is wasted during the day until the evening when you get home.
there is insanely huge gap in peoples perception of reality, schooling failed many.
less energy i need, less energy we need to capture (new word for generate), transmit, curtail, store,.... my heat pump is smaller then heat pump in costcos meat refrigerator, so smaller device is easier, quicker to manufacture, less people, cars , cubic feet to store, transport,.... and all this effect from on freaking house.
or hurricane, tornado, flood disables grid in my area, my house will stay livable for 3 days until i have to put on sweater... or today, there is heat wave predicted, at least 10 people will die today,... why?
My neighbors who heat their houses with wood (in an area where you absolutely don't have to—we have gas and electric at extremely reasonable prices), both have the nice high efficiency stoves to take advantage of the Biden tax credit and it seems to work just fine for them. Cords of wood around here aren't free but damn close to it.
Source: I'm considering a wood stove for my garage for working in the winter and they both talked my ear off about their experiences.
Predictably, all of those projects dropped out of the interconnection queue / process
https://www.interconnection.fyi/clusters/spp/disis-2021-001
I'm used to think that California is an overpriced legal quagmire if you want to build something. I didn't expect Texas to fare not much better.
I was like "yeah, I like that thing (solar) and think it's good for the world, I will do it in return for tax incentives"
Why exactly is that bad?
Sometimes I wonder if any of the people who complain about this bought an electric car or roof solar with tax credits or rebates.
Or maybe its just HN anti-crypto bias.
Because you could have just paid your taxes like the rest of us have to. Instead you made a big drama and are asking us to agree with you how unfair it all is that you have to pay taxes.
Tell me about your intentions without telling me about your intentions.
Not that I blame him. The lesson is though, never do anything just to avoid taxes. He would never have got into the solar business without the tax "opportunities".
Yea, corruption. Tax breaks on past gains are just handouts and everyone wants a handout.
To focus on "past": I don't think deferring the gains for a couple years is a big deal. It's not a handout because he'll still be paying the same taxes if he doesn't end up reinvesting the money. It just offers him some more time to set up a business, instead of having to do it same-year.
To focus on "gains": If you don't like the entire idea of reinvested money not counting as profits, oh boy that's a big objection, and it's not that way because of corruption.
Reinvesting money getting special treatment provides zero benefits to the economy. It falls under the fallacy that rich people can avoid investing their fortunes, inflation already makes that a nonstarter. The only result here is a handout.
Taxing businesses on revenue rather than profits doesn't work because it would bankrupt every business with slim margins, which is most of them, while effectively cutting taxes for the ones with the thickest margins and creating a massive tax subsidy for vertical integration.
> It falls under the fallacy that rich people can avoid investing their fortunes, inflation already makes that a nonstarter.
If all someone cared about was avoiding inflation they could just buy a stack of precious metals. Moreover, the return from typical passive investments (e.g. S&P 500) significantly exceeds the rate of inflation.
The preference for investment is as opposed to spending. If inflation is at 3% and someone is getting a 10% return from stocks, they can avoid real value loss while still spending up to 70% of the nominal profits. But we'd rather people build factories and develop new drugs and technologies than buy second private jets and third personal mansions.
Investment isn’t a business expense.
> If all someone cared about was avoiding inflation they could just buy a stack of precious metals.
Capital gains of precious metals “yield” drops you below inflation.
> But we'd rather people build factories and develop new drugs and technologies than buy second private jets and third personal mansions.
Someone needs to do that for your hypothetical 10% S&P gains. Giving handouts to wealthy people hardly discourages them using a private jet, just the opposite.
Investment is the thing where you pay a business expense today expecting a return in the future.
> Capital gains of precious metals “yield” drops you below inflation.
This is a defect in the tax code. Taxing inflation as a capital gain is ridiculous.
> Someone needs to do that for your hypothetical 10% S&P gains.
And then those companies get a tax deduction. Or in many cases they do make those returns without doing those things, because a lot of those companies have high returns by buying off regulators to constrain competition and then charging high margins to captive customers, which is another thing we don't like to promote over the ones actually making productive investments.
> Giving handouts to wealthy people hardly discourages them using a private jet, just the opposite.
The tax isn't deferred on the money used for personal consumption.
Investments like land aren’t necessarily consumed. You can reasonably deduct when an actual expense happens, but buying steel etc to be used next year doesn’t guarantee it is actually used rather than sold.
> Taxing inflation as a capital gain is ridiculous.
It’s a useful feature to discourage the exact wasteful approach you proposed.
> The tax isn't deferred on the money used for personal consumption.
Money is fungible, you hand me money to buy land and I can redirect money I would have spent to buy something else.
In many cases you're buying something intending it to be consumed, even if it hasn't been yet, and have to buy it ahead of time because you have to get it installed or connected or forged etc. before it can start being used.
If you then sell the steel instead of using it, the sale price gets added to your income and the cost was already deducted previously, so that cancels the previous deduction and you're back to paying the tax on it.
> Money is fungible, you hand me money to buy land and I can redirect money I would have spent to buy something else.
In order to get a tax deduction for buying land to build a solar farm, you have to buy land to build a solar farm. You can't spend that money on something else and still get that tax deduction. You can spend other money on something else, but the amount of money you have available to spend on other things has gone down, and the point is to increase your incentive to build the solar farm, which it is effective in doing.
An interest free loan means you’re ahead in that transaction but society is worse off when people do useless things to avoid taxes.
> You can spend other money on something else, but the amount of money you have available to spend on other things has gone down
One can’t invest all their money in any given year or one lacks the ability to buy food. You also can’t spend all your money in a given year or you go broke.
Thus both saving and spending are always happening and the government reducing the amount of money you’re required to save means you can up spending. There’s zero meaningfully differences between piles of money here.
Except that you had to sit on some asset in the meantime instead of using it for something. Or if that asset was a productive investment that yielded returns, the government is ahead in that transaction, because the returns from investing the deferred taxes increase your taxable income.
> One can’t invest all their money in any given year or one lacks the ability to buy food. You also can’t spend all your money in a given year or you go broke.
You can both invest all of your assets by taking on new debt to buy food and spend all of your assets and have nothing left. Both of those are things some people actually do. And for people who neither spend nor invest 100% of their assets, different incentives will affect the proportion of each one they do.
> Thus both saving and spending are happening and reducing the amount of money required to save means you can up spending.
Suppose you're paying a tax rate of 33% and have access to investments with a 10% return. If you have to pay the tax when you get the money then if you get $100 you immediately lose $33 and can only invest $67, and if you get 10% interest on the $67 then you can only reinvest $4.49. In other words, your compounding rate is now 6.7% instead of 10% and after 10 years you'd have $128.
If instead you pay the tax when you spend the money, your compounding rate is 10%. So if you started off with $100, after 10 years you have $259 before tax and then you pay a third of that in tax and get to spend $174.
So in one case you have the choice between spending $67 today or $128 in ten years, in the other case your choice is between spending $67 today or $174 in ten years. That increases the incentive to invest the money now and spend more of it later, instead of spending it now.
You do then get to spend more of it later, but the extra money you get to spend is value that only exists because of the additional investment.
And then the government gets $85 in taxes in 10 years instead of $33 today, i.e. it got a 10% ROI too.
No, you benefited from sitting on that productive asset. Getting a free stock option is still a meaningful benefit even if you never case it in.
Further assuming the asset kept up with inflation you’re better off after the sale vs holding cash for that same period.
> by taking on new debt to buy food
The money you got from that loan is an asset you’re not investing in that hypothetical. As to “spend all of your assets and have nothing left” yes I mentioned going broke was an option repeating what I already said isn’t an argument here.
> Suppose you …
Ignoring the possibility to just spend more today and also spend the same amount in 10 years is disingenuous here. Especially as assuming consistent rules you also benefit 10 years from now, so you get to spend more today and also spend more in 10 years.
Really free money lets you spend more, there’s no way around that. Further with the US tax code nothing says investments need to be in the US or capital gains ever get taxed this often is a pure dead loss for US taxpayer.
If you buy a ton of steel with no intention of ever doing anything other than selling it for the same value as you paid for it in a while, you haven't benefited from it and have in fact cost yourself value in opportunity cost because other investments return more than that.
If you get a free stock option and then there is a 30% chance it turns out to be worth something, the government benefits from the same 30% chance that you'll get money from it which will then be taxable income.
> The money you got from that loan is an asset you’re not investing in that hypothetical.
Loan principal doesn't create net assets. You get new money and new debt at the same time and they cancel.
> As to “spend all of your assets and have nothing left” yes I mentioned going broke was an option repeating what I already said isn’t an argument here.
I took your implication to be that it was something bad and so nobody would purposely do that. But people purposely do it all the time. They have some money and then choose to spend all of it instead of investing any of it.
> Ignoring the possibility to just spend more today and also spend the same amount in 10 years is disingenuous here.
Even that scenario still requires the amount of investment to increase. What you'd be doing is spending some but not all of the taxes deferred on the amount you initially invested, e.g. instead of spending $33 and investing $33 you invest $37 and spend $42, and you had ~$12 extra because of the taxes deferred on the $37. But now you're investing $37 instead of $33, and that's the minimum you could invest to get the same after-tax amount in ten years because now you haven't paid the taxes yet.
Doing that is also more disfavored because you get better returns from diverting more money to investment but the benefits of immediate spending haven't increased.
Your argument was buying a productive asset useful for the business. My argument is that’s a prediction which may be false, you suggesting no they are just randomly buying steel is losing your argument upfront.
> Loan principal doesn't create net assets. You get new money and new debt at the same time and they cancel.
Leverage is based on loans generating assets that can be invested. It’s clear your not actually arguing in good faith.
Also, I heard that Texas was the best place to build things (cf. Abundance by Thompson & Klein)
He couldn't get insurance without a waiver. He couldn't get a mortgage without insurance. So he didn't want to invest his own cash exclusively.
To me, the "obvious" solution is to create solar plants closer to their use and lay down new infrastructure. From my understanding, one of the major reasons to have power plants so far away from urban centers is because they were dirty or location locked (waterfalls, etc.). With solar, this need essentially goes away with the ability now to put solar plants essentially in the middle, or directly adjacent, to urban centers.
Could someone enlighten me as to why this is not feasible or if someone is already discussing this idea?
At least Dr Pepper comes from Texas. There’s that to like. Everything else just always seems upside down absurd.
ERCOT has the most generator-friendly interconnection process in the nation and leads the country in both renewable generation and utility-scale solar installations.
Mineral rights are dominant over surface rights in most jurisdictions, including other states like California. To call it "insane" just shows how little experience Mr. R has in land development.
OP lost the game playing on easy mode because he was purely chasing tax breaks with zero experience. The area OP is trying to develop in is a QOZ for a reason; he should have expected there to be upgrades necessary to delivery that level of power to a substation in an area where nothing else is going on.
OP is actually lucky that this project failed. Expecting to get the ISO-average solar PPA price for a project in Coleman County is nuts. This solar farm would have lost even more money had he continued.
Lots of seemingly little things that are necessary to get something off the ground.
No mineral rights like Texas, except for the occasional lignite open-pit mining, but that is very limited to certain regions. And even then, you'd be reimbursed handsomely for your troubles and the torn down equipment and land.
Grid connection would have been easier, because the electricity company is required to provide timely and cheap connections to the next sufficient connection point. However, there are exceptions, if they can prove that they cannot get contractors, so you have to wait some time, usually two to three years after you sign the contract for the connection.
Before connection contract signing, you need to enter an auction for the price of the power you will be providing. Fixed for 20 years. However, those 20 years start at signature, so the first 2 to 3 are wasted because of no connection. And you are competing with tons of other solar installations, so you can't really predict your profits when planning. Btw. they can even fail to connect you after you already built your plant for the same reason, so you may either wait or risk it...
Then you have to get approval from the local planning bureau. For that you need a number of assessments: You need to prove that there is no environmental impact, e.g. on rare species of vermin and weeds, no impact on nearby population e.g. through noise, reflection, or other annoyances. Then you have to get approval for the land-use change, because usually you are building on land zoned agrarian use, that has to be changed (and usually can never be changed back, so the land is worthless afterwards even if you don't actually build). You have to get approval from various environmental protection agencies that certify you are not in any kind of protected zone, or if you are (half of Germany is), then you are not affecting anything important (which is a 50/50 chance). Then your plans have to be submitted for public review, where local groups of busybodies, can enter their objections. If there are objections, the approval can be delayed or denied. You can of course "bribe" the public with a few well-placed donations to local groups, or by declaring your enterprise to be open to local investment for which you then sell shares and hand our corresponding parts of your profits. This of course necessitates a change in legal form, which of course needs another few rounds with lawyers, tax advisors, the tax office and a whole lot of due diligence because you are now handing out shares to small investors, which is kind of protected and therefore complicated...
Believe me, the OP's story is very harmless compared to what this would take here, even though the above is the simplified process after a few rounds of laws that were intended to accelerate building green energy.
P.S.: You need a fence and cameras. First because no insurance will allow it without the fence, some idiot kid could climb a panel and fall. Second because there are professional solar panel thieves around here, stealing them at night by the truckload.
As you say, the situation would be 100% identical if the government was receiving directly the tax and then buying these things directly. So why don't they do that? Because people with money will find ways to dodge taxes anyway. Tax incentives is basically admitting that people with money are selfish and cheaters, and that we need to "play their game" to achieve what they should normally and ethically do if they were not detrimental to society.
Interestingly enough, if the person would have paid their taxes normally and that this money would have been used for a government project, then the probability of success would have been higher (I know some government projects are really mismanaged, but so was this one anyway), because the government would have been in better position to 1) get experts opinions/supports, 2) understand the rules and regulations, 3) synchronize different projects for a better complementarity.
In California the companies also systematically under-invest in capacity and maintenance, so the up-front cost of any project, even single home solar can get unpredictable fast.
Take the many quotes in this article, which all sound like ChatGPT. Obviously, none of those people said those words, or even anything all that like what they supposedly said, because that's not what real people sound like.
If the author is willing to silently do that (which could be uncharitably described as "lying"), why should I trust anything else, like the numbers, or the factual claims?
Did any of this actually happen? (I note that there's not a single external link or fact that an ignorant layman like myself could quickly and easily verify, including the Astral Codex Ten part.)
Incidentally, there are a lot of typos in the titles in https://7goldfish.com/ .
> This is a much better read than I expected.
Hm...
First I want to acknowledge that draft one of this was LLM written, by Claude, though it reflects a pretty detailed outline of an experience pretty accurately. As you point out the quotes from both Mr. R and myself were also mostly spat out by the LLM as well (though not the quotes from external entities)
Mr. R signed off on the draft before posting, and well, it was me. I tended to think of it more as a "movie treatment" than a technical post-mortem, so I wasn't really worried about it. I also was only expecting this to get circulated within my own small/medium sized community so, in general, wasn't really worried about it.
That said, I definitely love using LLMs to write. To be perfectly honest they write considerably better and faster than I do (as you noted, lots of typo-o's and similar. I was still spelling at a 6th grade level when I graduated from Uni with CS degree), though I still feel like I have both ideas and experiences worth sharing. If you click any of the earlier stuff you will probably see the clumsy results that take about 10x the time.
I waffle on the idea of how much disclaimer of "written via LLM, but with multiple revisions and actual thought" vs "just don't bother saying anything" it's worth including. I'm curious if you consider having a ghost writer to be lying, or a cinematic re-enactment. I notice as I say that that it sounds defensive, and I want it to be a genuine question, as I share your concern about living in a media world where it feels like "basically nothing can be trusted".
For what it's worth, the numbers should be about right, though there is only so much energy we were willing to spend on the post-mortem. If there is some informational reason you would like to get into it deeply I would be happy to share the post mortem docs privately.
However... Look at this HN page! Not a single person here realized (before my still-downvoted comment) that this was a 'movie treatment', or that the 'quotes...were also mostly spat out by the LLM as well'. They all are taking it as 100% gospel, and engaging with it in good faith, as if it were genuinely a 'technical post-mortem' (as it takes pains to present itself) instead of your fiction-writing hobby,
Just make it clearer that this is a fictional story.
> I'm curious if you consider having a ghost writer to be lying, or a cinematic re-enactment
Yes. This is why ghost writers are supposed to be credited as such if they are contributing non-trivial content rather than simply serving as a amanuensis or an editor, and cinematic re-enactments are flagged as such if it wouldn't be obvious to a reasonable person (by reputable documentarians, anyway).
I'd expect ChatGPT to make no typographical errors in a list of post titles.
I didn't want to do BTC for two reasons: 1) I'm already WAY over exposed on crypto in my portfolio 2) I consider energy burn on mining to be part of a "zero sum helps no one" situation. I was trying to actually do something net positive for the world so didn't want to just drop more into that bucket.
number 2, btc mining environmental impact, I generally disagree,but I can understand the argument, however ...
number 1, the crypto exposure aspect
And I'm very sorry to hear S'pore wasn't good to you, this is one of my very favourite place on Earth (in particular the food).I'm sorry. Did I say bribe? I of course meant campaign donation?
Interconnection was limited because the wires they thought were in the ground were not what was actually there. (well, had degraded)
This was more of a "atoms are hard" kind of issue.
Natural gas just has more resources to buy politicians in the USA than solar does, that's the nature of the problem. Maybe the investor in this story should have spent have his crypto fortune on buying Texas politicians before even beginning this project - but buying off a lot of politicians is expensive, it's more the province of billionaires than of millionaires.
They should be requiring batteries with solar as well.
His install would have a net negative value to the Texas grid without it.
Absolutely untrue. Solar and wind can always just be disconnected at any moment. Wind resources are also a huge inertia source- windmill blades are massive grid stabilizers.
Renewable tech does not have a big coal fire they need to keep at a constant temperature. How about instead of requiring batteries with solar, we require coal plants to have sufficient bypass cooling that they don't need the load of a grid connection to stay cool.
Renewables are a boogeyman. The reality is simply that they are always able to undercut any fossil plant and they don't like that. It has fuck all to do with grid stability.
You are propagating some decades old ideas which don’t hold anymore.
The project was intentionally limited in scale as to be a "learning project" for me and the whole team. I'm also sort of ok with the idea that it failed, though super frustrated with the entire underlying incentive structure changing so much that we can't use anything we learned to try a second time.
Batteries were intentionally excluded because of the additional complexity overhead they added, and because the way the interconnection rules are written it would have put us into a different MW class which would have dramatically increased a number of other bureaucracy issues.
You are ABSOLUTELY INCORRECT that we would have had a net negative value to the Texas grid without batteries. Batteries are valuable, and increasingly so, but so is raw power (even at mid sun). This is reflected nicely in the hourly price charts, which at this point I'm super familiar with.
It's a significantly bad thing if something as straightforward as buying and plugging in solar panels requires special knowledge to not get screwed over.
> His install would have a net negative value to the Texas grid without it.
Oh come on.
And it's even plausible that ERCOT currently can't handle additional PV in whatever area the Roby parcel was in without adding BESS, although the person you're responding to has no idea if that's true or not, since neither they nor I knows where that is.
The conclusion in the post:
> Run five projects through the process simultaneously. Most will fail for reasons you cannot predict. With five, one might succeed. And switching to batteries instead of solar. Or at least solar plus storage.
Okay, how small of a connection would they have to restrict him to for me to be correct?
> BESS, simple curtailment at peak hours, or angle diversity would solve the problem.
That much extra curtailment is a major problem. That much extra angle diversity hurts output. Batteries are a workaround for not being able to properly hook up the panels.
Onsite BESS permits you to not only get by with a smaller hookup but also sell your energy at times when people are willing to pay for it.
I did my calculation already. It said that a 1/3 drop in hookup for panels that were already hookup-constrained is not a proper hookup.
Straightforward math.
He was doing it for the tax credits. Without the tax credits, this project wouldn't have come close to making sense.