So, you'd rather pay the carbon tax?

The other day I was given some pretty abrupt ‘push-back’ from some of the finer folks on social media about a vision I’ve come to adopt and made a post about.

I hadn’t really made this connection before I read about it, but now that I’ve thought quite a lot about it- this really seems to make a lot of sense…

Here goes:
The good folks at the Gov’t like to ‘encourage’ things through incentives. They use tax laws to shape economic behavior.

For instance, they want to reward folks to own a home so there are some really good tax breaks for the average home-owner like deducting their mortgage interest and a break on capital gains if they keep the house long enough.

If you look at it from the perspective you’ll start to see a world of things are on the books. I don’t want this to trigger a discussion on which things should or should not be incentivized- only that this practice exists.

I’ve found over the years that focusing and/or participating in the emotional ‘should or shouldn’t’ discussion only leads to unnecessary energy drain and only delays the inevitable- doing what we need to do based on the facts surrounding the new thing.

Along those line is the current situation with the Inflation Reduction Act that extended many of the ‘clean energy’ tax incentives. There are many ‘clean energy’ incentives that go far beyond just rooftop solar- and they are on the books as tax code and public law.

Here’s where that vision kind of starts…
I grew up in the 70’s and 80’s. I remember a time when drinking and driving wasn’t necessarily a thing. Seat belts were suggestions, and smoking was everywhere.

With regards to smoking, based on my memories of that era, I saw a progression of things happening.

Early on, before I can remember, they added mandatory health warnings in ads- it didn’t really slow down smokers.

A few years later they outright banned TV and Radio commercials- still people smoked.

Later, heavier wording on the warnings were used- everyone continued to smoke.

Public service/educational campaigns were run non-stop warning people of the connection with poor health outcomes (primarily lung cancer) and smoking. People continued to smoke.

Back then, a pack might be like 50 cents up to a dollar or so.

Somewhere along the lines the taxes were increased. I can remember prices going from seemingly 2 bucks all the way up to 6-8 bucks a pack.

Suddenly, it seemed, everyone wasn’t smoking so much any more. They were all quitting for their ‘health’…

Maybe my memories are faulty, but that’s kind of what it seemed like to me. The overall effect was that the hard core smokers kept on smoking, but the overall number of smokers seemed to drop significantly.

Now, with that story in mind, let’s turn to the current situation and make some extrapolations. Try to remove any emotional feelings about the ‘global warming’ or ‘climate’ topic and focus on where public policy is right now and where it might go in the future.

There’s been solid opposition to ‘going green’. The legacy oil (and a few other) industries have been fighting it tooth and nail using every trick in the playbook, including dumping untold numbers of dollars into it.

Despite one of the most profitable and entrenched industries rallying support from all areas they can, laws have moved towards reducing the use of energy that causes carbon emissions.

Like it or not, the IRA explicitly rewards those who would make shifts towards ‘clean energy’. The public policy has shifted, even in the face of stiff opposition.

Specifically, for the next ten or so years, residential homeowners who install solar energy systems will receive a tax credit for 30% of the cost of that system.

Ok, that’s cool. Public policy (law) incentivizes  ‘clean energy’ and for rooftop solar (and other systems) that lasts up to 2032. What happens after that?

Well, just like with the cigarettes, taxes might come into play…
There is a lot of activity surrounding the concept of a ‘carbon tax’ and there’s no shortage of activists and law makers who speak about how that might be ‘necessary’.

I have opinions but that doesn’t matter- what matters is this…

How serious do you think those folks are about getting a carbon tax instituted here in the US. ’They’ got us to the point where ‘clean energy’ is incentivized with tax credits. Who want’s to bet against ‘them’ on the subject of ‘carbon taxes’?

Not me. I think the carbon tax is coming and, just like with smokers- those who stubbornly refused to make a shift to ‘clean energy’ will be the ones who are paying the carbon tax.

I see a future that holds a rapid expansion/adoption of rooftop solar by homeowners who slowly come to the realization that this is coming followed by a period of extreme price pressure on the legacy oil based energy where those who didn’t shift wind up paying heavy taxes.

Just like packs of cigarettes going from a buck or two all the way up to 6-8 bucks, the price for power produced from fuels that cause carbon emissions will more than double or triple once the carbon tax takes a foothold in the US.

To me, it is clear as day. Carbon tax is coming to a utility near you. The only two questions are when and what are homeowners going to do about it.

I see homeowners across the US as a more savvy and aware group within the US population. They will see what I am talking about soon enough and when they do, they will make the calculations and decide if rooftop solar is right for their home and particular energy use.

They have already woken up to solar and are making the move in record numbers. 2022 was a record year for residential solar and I’ve heard plenty of anecdotal stories about this year pacing a good bit faster.

There will reach a point soon where the current number of solar companies who can install solar in a trustworthy way will be beyond capacity. Wait times are already more than 3 months in some areas where I’ve seen up to 6 months in others.

There’s more demand for rooftop solar right now than companies who can install it- which will drive prices higher. And this is just the beginning, when more homeowners wake up to the carbon tax situation- the flood gates will open.

Bottom line is rooftop solar is viable, reliable, and in many ways affordable and I think should be considered based on that alone. The carbon tax will make home energy bills (gas and electric) rise quickly and the ‘economics’ of solar will be even better (for those who took advantage early).

If you are looking into rooftop solar for your home, I have a book coming out soon that I think you’ll probably be interested in. Click here to be notified when I release Tucson Solar Insider Desk Guide for Buying Solar.

Be Good!
Curtis