Prices were high even during the Biden administration.
Markups due to subsidies are a part of it.
Markups due to subsidies are a part of it.
The other issue was just plain pent-up demand. Installers could charge what they wanted because there weren't enough of them to go around, even as everybody and their dog started their own installer business. Many of those businesses were poorly run and have since gone under, leaving the homeowners high and dry when the inverter craps out and they're told by every other installer that they will not work on someone else's install and also told by the inverter manufacturer that if they attempt to replace the hardware themselves it will result in their warranty being voided.
- Greed kicks in because capitalism: prices rise again, maybe not back to pre-subsidy levels, but they rise.
- Subsidy gets axed: prices rise to above pre-subsidy levels.
(Note: I'm personally entirely pro "subsidize things you want more of". But that requires a stable, trustworthy government that plans on longer timescales.)
the Netherlands had a net-metering subsidiy + good competition + frictionless install and as a result we have 3,5 solar panels per person installed.
- Demand drops due to increased price to buyers.
- Prices drop so manufacturers can remain profitable.
There were no greedy people before capitalism. Of that we can be sure.
Capitalism, on the contrary, rewards it. The best way to be under capitalism is greedy (sneakily so, if necessary).
So yes, it is uniquely new to have a value system that rewards greed.
Without greed it goes from a positive sum system to a destructive system because you no longer have the parties being better off from the transaction. From a cursory standpoint that might be ok (the economy won't implode if some small fraction does this like a minority of commercial activity being charity functions) but you basically lose most the information conveyed in prices and cost causing complete loss of productive allocation and it is an economic implosion.
It's a pointless conversation if you're willing to do that. You're just changing definitions before arguing them.
An example I'll take from Cory Doctorow: Google search isn't getting worse. We know this because nobody's toppled Google's monopoly on search. Because of the magic of the market, if what you perceive as search being worse was actually search being worse, then, Google would no longer dominate.
Since google continues to dominate, actually, search isn't worse.
Capitalist analysis requires QED circular logic to justify its inherent contradictions.
Capitalism may occasionally reward value, but very, very rarely does it reward value more than greed.
Proof: teachers are some of the worse paid jobs in our society despite being essentially the backbone of our nation. A single teacher in the course of a year can completely alter the course of history for a classload of kids. Multiply over a two decade career... And that's just elementary school. Highschool teachers will influence hundreds of kids each semester.
Yet their wages in many states cap out at around what a recruiter makes. Recruiters being nothing more than middlemen between a labor market and a hiring market - as a former recruiter, trust me, that multi billion dollar industry creates essentially no value.
Of course the capitalist analysis means the entire system is immune to criticism - "actually, teachers don't get paid much because they don't add much value, if they added more value, they'd get paid more." QED. Circular logic.
"The multi tens of billions of dollars American health insurance industry adds value. If it didn't, it wouldn't be worth multi tens of billions of dollars."
Capitalism rewards greed, and the greediest are the most capitalistically rewarded.
Customer is willing to pay 10k, state is willing to pay 5k. Supplier will charge 15k.
Assuming the base cost is 8k
Supplier A and Supplier B charge 15k and have 100 customers between them, making 350k each
Supplier B decides to undercut Supplier A, and charge 14k, and get all the customers, making 600k profit
Customer might be willing to pay 10k, but if there's two identical quotes, one for 10k and one for 9k they'll go for the 9k
But you see the point. There's a comfortable cushion where everyone can make more money off the taxpayer and have an easier time of it. Spend a bit of it on better marketing to elevate yourself and justify the higher price in people's minds.
You seem to think that two companies selling product A will rather sell 50 for $10 per unit profit than 100 for $9 per unit profit because it's easier.
I mean, it's a view, sure.
If the numbers are closer, then that's exactly what happens.
Would you rather sell 50 units for $19 per unit or 100 for $10 per unit? Option 1 gives you way less overhead and headache with cheap-o customers.
In France, the state pays max(rate * rent, cap) for apartments for students, unemployed and poor workers. Usually people don't qualify for ratio of the rent, because it's way over the cap for the subsidy. To keep up with inflation, the state re-evaluate the cap of the subsidy almost every year.
A french economist showed that there was a correlation between the cap of the rent subsidy and the rental market prices for small apartments. Of course, correlation is not causation, it could just be that the rental market follows the inflation as much as the cap. But this correlation doesn't happen for bigger and more luxurious appartments. Her explanation is that your poor household is only ready to afford €100 per month, as an example, the subsidy cap is €500, so the rental market prices these apartments to €600 (= 100 + 500). When the state re-evaluate the cap to €550, the rental market goes up to €650. (= 100 + 150)
[1] https://www.insee.fr/fr/statistiques/fichier/1376573/es381-3...
In a market like solar, there is production of more solar systems. There are also multiple readily available substitutes. (e.g. on-grid power) The effect of the subsidy should drive increased volume from manufacturers, keeping net price stable.