Newsflash: the sun heats the Earth

I've seen previous explanations such as this, but I like the way this author explains the sun's impact in climate.

Carbon Week: The sun raises the seas

Republish Reprint

Nir Shaviv, Special to Financial Post | June 16, 2015 6:52 PM ET

http://business.financialpost.com/fp-comment/carbon-week-the-sun-raises-the-seas


...
In fact, models including the real effect of the sun also do a much better job in explaining 20th century global warming than those limited to the influence of human carbon dioxide emissions alone. 

Most importantly, empirical evidence shows that the sun’s influence on climate is very large, much larger than expected from variations in the Total Solar Irradiance — the only solar forcing that is considered by the IPCC. The full forcing, which is large, can be quantified by studying the sea level as it is linked to heat going into the oceans and therefore the radiative forcings through thermal expansion.

This can be seen in the figure, where the tide-gauges-based sea level change rate is seen to vary in sync with the solar cycle, averaging close to 2 mm a year. The amount of heat inferred from this large correlation corresponds to at least six times the forcing of the irradiance alone. However, this empirical evidence and its implications are ignored in models considered by the IPCC.
...

I have reviewed the IPCC climate models and the evidence shows that their “climate sensitivity,” such as to CO2 variations, is far too high. Models which exclude the real effect of the sun require an artificially high climate sensitivity to explain 20th century warming. This high sensitivity then predicts a high temperature rise for any given scenario over the 21st century.

Instead of the model simulations, if we look at the evidence we see a different story.

A range of empirical evidence points to a low climate sensitivity to carbon dioxide (CO2), meaning that CO2 has limited effect on warming. In particular, large CO2 variations over geological time scales give rise to no apparent temperature variations and large volcanic eruptions cool the planet by only 0.1°C on average (compared with 0.3-0.5 predicted by models employed by the IPCC).

The vaping paradigm

Matt Ridley has a great piece about the inventor of vaping and how he developed the technology so he could stop smoking himself.

Today more than a million smokers in Britain have quit by using e-cigarettes, and at least another million have cut down. The number is growing all the time, and it’s now easily the most popular method of quitting tobacco. That means a lot less lung cancer, heart disease, stinky clothing and fire risk. What’s more, none of these people had to get a prescription, or be subsidised by the taxpayer or treated by the NHS, as with other methods of quitting such as patches, gum, psychiatry or acupuncture. It’s a purely voluntary, private-sector solution.

You would think the public health authorities would be shouting this from the rooftops, but the Welsh government is trying to ban the use of e-cigarettes in enclosed public spaces, the British Medical Association remains implacably disapproving, the World Health Organisation censorious, and the European Commission set on banning refillable versions. Southern Rail is banning vaping on its trains from next month, and Starbucks, Caffè Nero, All Bar One, and KFC also have bans.

The opponents fear that vaping is a gateway into smoking, when all the evidence suggests it’s a floodgate out. The number of ‘never smokers’ who vape remains negligible. I am genuinely baffled by how hard it is to get medics to understand the concept of harm reduction: that if people are doing something harmful but hard to give up, you should encourage them to switch to something much less harmful that satisfies their urges. They talk of vaping as ‘renormalising smoking’, which makes about as much sense as saying coffee-drinking renormalises whisky-drinking. It’s denormalising smoking.

It's a good example of how entrenched ideas fall hard.

Another is the consensus on cholesterol:

http://joannenova.com.au/2015/05/cholesterol-how-the-web-and-books-are-years-ahead-of-consensus-and-govt/

The EPA released a report showing that fracking is not nearly the problem some people insist it is:

http://www2.epa.gov/sites/production/files/2015-06/documents/hf_es_erd_jun2015.pdf

Melting Arctic

Students in my environmental classes always express fear and alarm about the problem of melting ice causing the seas to rise. But is this really a problem? Sea ice fluctuates over time. As I've pointed out, the recent predictions of a "death spiral" in the Arctic have not materialized. The projections started in 1978 at a peak of Arctic ice, so of course the ice would be expected to decline. So is this a problem, or is it an example of alarmism intended to frighten the public into accepting higher energy costs and a lower standard of living, while also repressing the poor in developing countries?

Here's a graph of total sea ice on the planet:

http://arctic.atmos.uiuc.edu/cryosphere/iphone/images/iphone.anomaly.global.png

Just to provide some historical perspective, here are some headlines over the years raising fears of ice melting and flooding the coastlines:

2014:

http://www.nytimes.com/2014/05/13/science/earth/collapse-of-parts-of-west-antarctica-ice-sheet-has-begun-scientists-say.html?_r=0

1947:

http://timesmachine.nytimes.com/timesmachine/1947/05/30/87757175.html?pageNumber=23

1932:

http://timesmachine.nytimes.com/timesmachine/1932/05/15/100739680.html?pageNumber=159

Solar energy fantasies

IMO, solar photovoltaics make a lot of sense for specific applications, such as remote lighting and low-energy applications. The technology makes little if any sense as an alternative to a centralized power plant. A perfect case in point is Ivanah, the huge solar array in Nevada near the California border between LA and Las Vegas. I've seen it myself, but rather than give my report, I'm reblogging an excellent blog:

Solar Fossil Fueled Fantasies

Willis Eschenbach / 2 days ago June 15, 2015

Guest Post by Willis Eschenbach.

Sometimes when I’m reading about renewable technologies, I just break out laughing at the madness that the war on carbon has wrought. Consider the Ivanpah solar tower electric power plant. It covers five square miles in Southern California with mirrors which are all focusing the sun on a central tower. The concentrated sunlight boils water that is used to run a steam turbine to generate electricity.

Sounds like at a minimum it would be ecologically neutral … but unfortunately, the Law of Unintended Consequences never sleeps, and the Ivanpah tower has turned out to be a death trap for birds, killing hundreds and hundreds every year:

“After several studies, the conclusion for why birds are drawn to the searing beams of the solar field goes like this: Insects are attracted to the bright light of the reflecting mirrors, much as moths are lured to a porch light. Small birds — insect eaters such as finches, swallows and warblers — go after the bugs. In turn, predators such as hawks and falcons pursue the smaller birds.

But once the birds enter the focal field of the mirrors, called the “solar flux,” injury or death can occur in a few seconds. The reflected light from the mirrors is 800 to 1,000 degrees Fahrenheit. Either the birds are incinerated in flight; their feathers are singed, causing them to fall to their deaths; or they are too injured to fly and are killed on the ground by predators, according to a report by the National Fish and Wildlife Forensics Laboratory.”

– David Danelski, Solar: Ivanpah Solar Described as Deadly Trap for Wildlife,” Riverside-Press Enterprise, April 8, 2014.

But of course, that’s not what made me laugh. That’s a tragedy which unfortunately will be mostly ignored by those good-hearted environmentally conscious folks suffering from chronic carbophobia.

The next oddity about Ivanpah is that despite being powered by light, it is light-years away from being economically viable. Like the old sailors say, “The wind is free … but everything else costs money”.

But being totally uneconomical doesn’t matter, because despite costing $2.2 billion to build, Google is a major shareholder, so at least they could afford to foot the bills for their high-priced bird-burner …

… get real. Google would much rather use taxpayer dollars to burn birds alive than foot the costs themselves. Being good businessmen and women they sought and got a $1.6 billion dollar taxpayer funded loan, presumably because no bank on the planet would touch the project. And if the banks wouldn’t touch it, why should you and I?

But that’s not enough for these greedy green pluted bloatocrats. Now, they are applying for a $539 million dollar GIFT of your and my taxpayer money in order to repay the money that you and I already lent them … we should give them the money to repay ourselves? Give an unimaginably wealthy company money to repay us what we have loaned them? Have I wandered into a parallel universe? This is GOOGLE, folks, and they’re trying to poor-mouth us?

And of course, that’s not what made me laugh either. That is another tragedy which unfortunately will be ignored by those who wish to see electricity prices rise … you know, folks like President Obama, who famously said:

Under my plan of a cap and trade system, electricity rates would necessarily skyrocket …

Of course, such an electricity price rise would mean nothing to him, like every recent President he’ll leave office a multi-millionaire. And such an energy price rise means nothing to the Google execs who are burning birds alive … but for those of us here on the ground, causing the electricity rates to skyrocket is not the moral high ground, it is a crime against the poor.

So that is no laughing matter at all.

No, the part that I didn’t know about Ivanpah (and other solar steam plants), the part that got me smiling, was that there is a problem with a solar tower that is generating steam. This is that steam turbines don’t do well at all with half a head of steam. For full efficiency a turbine needs full pressure steam in order to operate. And it has to have full pressure, not when the valves are closed to let the pressure build up, but when the turbine is actually using the steam.

And since you can’t store steam, that in turn means that Google can’t start up their you-beaut solar tower until fairly late in the morning.

Well, the solution that the good engineers hired by Google came up with was simple.

Start the sucker up using natural gas. That way, first you can heat the cool boiler water before the sun comes up. Then, as more and more solar energy comes online during the morning, you can taper off on the natural gas.

But having a solar plant that runs on natural gas, although funny, wasn’t the best part … it gets better:

One big miscalculation was that the power plant requires far more steam to run smoothly and efficiently than originally thought, according to a document filed with the California Energy Commission. Instead of ramping up the plant each day before sunrise by burning one hour’s worth of natural gas to generate steam, Ivanpah needs more than four times that much help from fossil fuels to get plant humming every morning. MARKETWATCH

These good folks have underestimated the amount of fossil fuels that the plant would need by a factor of four, and they want us to follow their lead in reorganizing the world’s energy supply? And of course, in the familiar refrain, the taxpayer is expected to foot the bill for their ignorance and their inept calculations.

So now, I find out that the Ivanpah plant runs on natural gas four hours a day, and I gotta say, I did find that funny. But in the most ironic twist of all, the above link goes on to say:

Another unexpected problem: not enough sun. Weather predictions for the area underestimated the amount of cloud cover that has blanketed Ivanpah since it went into service in 2013.

And that brought the joke all the way around. I found that hilariously ironic. Because of alarmism based on computer model predictions of rising temperatures in 100 years, we’ve built a fossil-fuel fired solar plant which is already in trouble because of failed computer model predictions of the clouds over the next few years … don’t know about you, but that cracked me up.

Now, even the best solar energy conversion devices don’t operate 24 hours a day, or even 12 hours a day. Generally, eight hours a day or even less is the norm. And that has been cut down by clouds … so at present, dreaded fossil fuels are likely providing a third of the energy to fuel the plant.

Gotta say, I don’t know whether to laugh or cry about things like the natural-gas powered Ivanpah solar power plant fiasco. On the whole I have to favor laughter … but dear heavens, the damage that environmentalists are doing in the name of the environment is appalling. Burning birds alive in the name of making energy prices skyrocket? Have we sunk this low? Really?

In any case, my best guess is that this is a self-limiting problem, or it would be without subsidies. The “levelized cost” of solar thermal is horrendous. It is the only technology which is more expensive than offshore wind, and it is the most expensive of the commonly analyzed grid-scale renewable choices. It won’t work without the kind of multi-million dollar taxpayer subsidies that the Google folks think that they deserve … me, I would never have given them the loan of taxpayer money in the first place, that’s the bank’s job, not the government’s job. More to the point, I think they deserve to pay the damn loan back themselves.

Let me close on a more optimistic note. The referenced article says:

Bird carnage combined with opposition by Native American tribes to industrial projects on undeveloped land has made California regulators wary of approving more. Last September, Abengoa and BrightSource abandoned their quest to build a solar-thermal project near Joshua Tree National Park when the state regulator told them the plant’s footprint would have to be cut in half.

In March the Board of Supervisors of Inyo County, a sparsely populated part of California that is home to Death Valley National Park, voted to ban solar-thermal power plants altogether. “Ivanpah had a significant effect on the decision making,” said Joshua Hart, the county’s planning director.

If the final end of Ivanpah is the end of any further Ivanpahs ever, I suppose that I’d say that Ivanpah was worth whatever it cost … although I’m sure the birds would have preferred a different path to that outcome. As long as Ivanpah is in operation birds will continue to be burned alive in the name of driving up electricity prices … and these monomoniacal carbophobes still think that they have the high moral ground regarding fossil fuels?

Because I rather suspect that neither the birds nor the poor would agree …

w.

Bill McKibbon and Anthony Watts

Nice report of a meeting between these two. The McKibbon described here is far more reasonable than the McKibbon I saw at a college "divestment" event he organized and spoke at. Glad to see this.

The takeaway line: We both agreed that if we could talk to our opponents more there would probably be less rhetoric, less noise, and less tribalism that fosters hatred of the opposing side.

I mostly agree with Watts on the areas of disagreement because my own experience and reading corroborates his conclusion that McKibbon is motivated more by emotion than data. That's been my experience with progressives overall, and I think it's partly a result of ignorance of history and partly a result of their sense of moral superiority (i.e., they think they're the only ones who care about the environment, about the future, etc.). In my view, facts and rational analysis are more useful for creating public policies; individuals react emotionally to deal with problems, but when policy is based on emotions, it can often be misguided, as it is in the CO2 climate debate.

The entire piece:

http://wattsupwiththat.com/2015/06/06/my-one-on-one-meeting-with-bill-mckibben/

My one-on-one meeting with Bill McKibben

Anthony Watts / 1 day ago June 6, 2015

About a month ago I got an e-mail from Bill McKibben telling me that he would be in my town to do a presentation on June 5th. He wanted to know if he could meet with me and just sit down over a beer and talk about things. I jumped at the chance. This photo below was taken yesterday, June 5th, at the Sierra Nevada Taproom in Chico, CA just before 6PM PDT after I had a two hour conversation with Bill McKibben, founder of 350.org.

One of the most interesting things about Bill McKibben is that he has always been civil and courteous to me unlike some others that are on the other side of the climate debate aisle. So, I didn’t think twice about meeting him because I knew that despite our differences we would likely have a very interesting and productive conversation.

My prediction came true. We had conversations that spanned everything from stories about our families and how we grew up to the current debates over climate and energy. We also spoke of the personal challenges that each of us face due to who we are and how we are perceived by others.

I didn’t make any recordings and I didn’t make any notes, I also did not tell anyone I had a time of this meeting and I don’t think Bill did either. I really didn’t want to because the last thing I wanted was to have someone come along and disrupt it. As I mentioned to Bill that some of the local environmentalists have what I would describe as a “severe hatred” of my position on climate change and because I have the to temerity to dare write about it. In fact, he was going to be addressing a number of environmentally oriented people right after our meeting at an event cosponsored by our local alternate radio station and the Butte Environmental Council. I suggested to Bill that perhaps he should mention that we had a pleasant and productive meeting to see if a “groan” might erupt from the audience. He said he would but I have not heard back from him yet as to whether or not my prediction came true.

Bill and I both had a couple of beers and we shared a dessert all the while chatting away as if we’d known each other for years. Essentially we have, but we just never met in person before.

Below are a few highlights that I remember from our conversation.

What we agreed upon:

We both agreed that tackling real pollution issues was a good thing. When I say real pollution issues, I mean things like water pollution, air pollution, Ocean plastics pollution, and other real tangible and solvable problems.

We both agreed that as technology advances, energy production is likely to become cleaner and more efficient.

We both agreed that coal use especially in China and India where there are not significant environmental controls is creating harm for the environment and the people who live there.

We both agreed that climate sensitivity, the response to a doubling of carbon dioxide in the atmosphere, hasn’t been nailed down yet. Bill thinks it’s on the high side while I think it’s on the low side neither of us thought the number had been correctly defined yet.

We both talked about how nuclear power especially Thorium-based nuclear power could be a solution for future power needs that would provide a stable base electrical grid while at the same time having far fewer problems than the current fission products based on uranium and plutonium.

We both agreed that the solar power systems we have put on our respective homes have been good things for each of us.

We both agreed that there are “crazy people” on both sides of the debate and that each of us have suffered personally at the hands of some of the actions of these people (you know who you are). We both spoke of some of the hatred and threats that we have endured over the years, some of which required police intervention.

We both agreed that if we could talk to our opponents more there would probably be less rhetoric, less noise, and less tribalism that fosters hatred of the opposing side.

We both agreed that we enjoy the musings of Willis Eschenbach on WUWT, and we spoke about his most recent essay describing the self-regulating mechanism that may exist due to albedo changes in the inter-tropical convergence zone (ITCZ).

We both agreed that it would be a great thing if climate skeptics were right, and carbon dioxide increases in the atmosphere wasn’t quite as big a problem as we have been led to believe.

What we disagreed upon:

Climate sensitivity was the first issue that we disagreed about. While we both thought the number has not been nailed down yet, Bill thought the number was high, while I thought the number was lower such as the kind of numbers we were getting from therecent climate sensitivity analysis of Judith Curry and Nicolas Lewis. I spent a fair amount of time explaining to Bill how I believe, as do many others, that the effect of carbon dioxide in our atmosphere is now approaching saturation point, such that a doubling of CO2 from this point forward might not be as catastrophic rise problematic as we have been told.

Bill seems to think that carbon dioxide influences along with other man-made influences have perturbed our atmosphere, which he considers “finally finely tuned”, enough to create some of the severe weather events that we have witnessed recently. He specifically spoke of the recent flooding in Texas calling it an “unnatural outlier”, and attributed it to man-made influences on our atmospheric processes. I pointed out that we only have about 100 years or so of good weather records and that we don’t really know for sure what the true outlier bounds are for such kinds of events. For example I told him of thegreat 1861 flood in California, followed by an exceptional drought within a few years. At the time, both events seemed like fantastic outliers. I also spoke of studies that have been attributing more extreme rainfall to the effects of cities.

And there just doesn’t seem to be any significant trend as this graph shows:

Global Precipitation, from CRU TS3 1° grid. DATA SOURCE

[Willis Eschenbach writes] As in all of the records above, there is nothing at all anomalous in the recent rainfall record. The average varies by about ± 2%. There is no trend in the data.

As does this one:

Bill also seem to think that many other weather events could be attributable to the changes that humans have made on our planet. He was quite sincere about this belief and cited many examples of events he witnessed or saw the aftermath of. I could tell that his perspective was one of empathy as were many of his concerns. But I came away with the impression that Bill feels such things more than he understands them in a physical sense. This was not unexpected because Bill is a writer by nature, and his tools of the trade are to convey human experience into words. I can’t really fault him for feeling these things and expanding on them but I did note he seemed quite resistive to factual rebuttals because they didn’t assuage the feelings he harbored.

For example I tried to explain how the increase in reporting through cell phones, video cameras, 24-hour cable news, and the Internet have made severe weather events seem much more frequent and menacing than they used to be.

Bill and I disagreed about the usefulness of computer models and I pointed out how models have been diverging from the measurements. Bill seemed concerned that we have to act on the advice of the models and the people who run them because the risk of not doing so could be a fateful decision. I pointed out that mankind has been quite adaptable and resilient, and thrived on warmer periods of Earth’s history than cooler ones, while he seemed to think that we are more fragile especially when it relates to crop production then one might think.

A few other points that we discussed:

Bill and I talked about how government can sometimes over-regulate things to the point of killing them, such as some of the problems I had with the California Air Resources Board and my attempt to start an electric car company in 2008. He was surprised to learn that electric cars in California have to be emissions tested just like gasoline powered cars, instead of simply looking into under the hood and noting the electric motor and checking a box on a form. He laughed all the way through my tales of woe trying to deal with that insane bureaucracy, and was quite sympathetic.

I told Bill that up until recently I had trusted (but considered misguided) the climate scientists at NOAA/NCDC, but with the recent publication of the Karl 2015 paper and some of the data manipulation shenanigans that I witnessed, I no longer have that trust. Bill responded with he doesn’t know those people but he believed that Dr. James Hansen had integrity. I asked Bill that if the people at NOAA/NCDC had the same integrity he believed Jim Hansen has, why would they have to adjust data that had been previously considered okay, and why would they not publish data from the most state-of-the-art Climate Reference Network in our monthly and yearly US. State of the Climate reports, but instead rely on the old and problematic surface temperature network that is full adjustments, assumptions, and biases – none of which exist in the Climate Reference Network? He didn’t have an answer.

Bill and I both lamented how some people perceived us on opposite sides of the aisle. He was annoyed that some people see him as an “idiot”, while I spoke of my annoyance of being called a “denier” when I don’t deny that the climate has warmed; I just don’t think it’s as big a problem as some others do. I can tell you this: I don’t think Bill McKibben is an idiot. But I do think he perceives things more on a feeling or emotional level and translates that into words and actions. People that are more factual and pragmatic might see that as an unrealistic response.

Bill was amazed at my ability to keep WUWT going all these years without having any budget, sponsor or funding. I explained to him, as I have many times to readers that doing this is little more than an extension of all my years in broadcasting. In broadcasting we never allow for “dead air”; we always have to keep fresh content going and thanks to the help of many people who contribute their time for moderation, in the form of guest articles, and in the form of comments I am able to keep this enterprise fresh and relevant. Bill says he reads every day and I took that as a compliment.

In closing:

I offered Bill the ability to inspect what I was going to write about our meeting before I published it. He declined saying it’s okay, that he’ll just comment on whatever I write.

All in all it was a good meeting and while we might fervently disagree on some (but not all) issues, I can say that Bill McKibben was a pleasant individual to talk to and that I could count him among one of the more friendly people in the climate debate.

Billionaire Elon Musk reaps billions from deluded public

Elon Musk's growing empire is fueled by $4.9 billion in government subsidies

Even the L.A. Times recognizes the absurdity of forcing middle-class taxpayers to enrich billionaires such as Elon Musk. Yet Musk is a darling of many progressives. Give him credit. He knows how to manipulate not just the public, but the government officials who hand over this money.

BTW, I've started copying articles and not just links because often the links later die, or the original article is edited in response to outside pressure. Hope the LA Times doesn't mind.

:)

Also, Musk provided an Orwellian response/defense:

Tesla CEO Elon Musk said Monday that a Los Angeles Times articleclaiming his companies received government subsidies is incorrect.(Tweet This)

"The article makes it seem as though my company is getting some huge check, which is fundamentally false," he told CNBC's "Power Lunch."

According to the article, Musk's three companies, Tesla, SolarCity and SpaceX, "have benefited" from a total of about $4.9 billion in government subsidies. Musk said that the article was misleading and did not accurately portray the situation.

Musk said that "none of the incentives are necessary, but they are all helpful," referencing incentive packages some of his companies received to build factories in states like Nevada. He said that the reason these incentives exist is because "voters want a particular thing to happen, and faster than it might otherwise occur."

"That is all that these incentives achieve," he added.

Musk said that the only incentives he bargained for directly were state-level incentives. These include a small launch site in Texas for SpaceX and a Tesla gigafactory in Nevada. He explained that such incentive packages have existed long before his companies received some of them.

http://www.cnbc.com/id/102723117

Of course, no one claims his company received "some huge check." These subsidies are far more subtle than that; otherwise, the LA Times would not have had to investigate the situation. I'd like to know of a single taxpaying voter who approves of enriching billionaires like this. "Voters" in the abstract include non-taxpayers who have nothing to lose from this, as well as possibly millions who think they will personally benefit from this Orwellian transfer of wealth from the middle class to the elite.

LA Times article:

http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html#page=1

Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.

And he's built those companies with the help of billions in government subsidies.

Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.

"He definitely goes where there is government money," said Dan Dolev, an analyst at Jefferies Equity Research. "That's a great strategy, but the government will cut you off one day."

Three companies, $4.9 billion in government support

The figure compiled by The Times comprises a variety of government incentives, including grants, tax breaks, factory construction, discounted loans and environmental credits that Tesla can sell. It also includes tax credits and rebates to buyers of solar panels and electric cars.

A looming question is whether the companies are moving toward self-sufficiency — as Dolev believes — and whether they can slash development costs before the public largesse ends.

Tesla and SolarCity continue to report net losses after a decade in business, but the stocks of both companies have soared on their potential; Musk's stake in the firms alone is worth about $10 billion. (SpaceX, a private company, does not publicly report financial performance.)

Musk and his companies' investors enjoy most of the financial upside of the government support, while taxpayers shoulder the cost.

lRelated

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Elon Musk unveils Hyperloop design

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8

The payoff for the public would come in the form of major pollution reductions, but only if solar panels and electric cars break through as viable mass-market products. For now, both remain niche products for mostly well-heeled customers.

Musk declined repeated requests for an interview through Tesla spokespeople, and officials at all three companies declined to comment.

The subsidies have generally been disclosed in public records and company filings. But the full scope of the public assistance hasn't been tallied because it has been granted over time from different levels of government.

New York state is spending $750 million to build a solar panel factory in Buffalo for SolarCity. The San Mateo, Calif.-based company will lease the plant for $1 a year. It will not pay property taxes for a decade, which would otherwise total an estimated $260 million.

The federal government also provides grants or tax credits to cover 30% of the cost of solar installations. SolarCity reported receiving $497.5 million in direct grants from the Treasury Department.

Tesla's Elon Musk and his big ideas: A brief history

That figure, however, doesn't capture the full value of the government's support.

Since 2006, SolarCity has installed systems for 217,595 customers, according to a corporate filing. If each paid the current average price for a residential system — about $23,000, according to the Union of Concerned Scientists — the cost to the government would total about $1.5 billion, which would include the Treasury grants paid to SolarCity.

Nevada has agreed to provide Tesla with $1.3 billion in incentives to help build a massive battery factory near Reno.

The Palo Alto company has also collected more than $517 million from competing automakers by selling environmental credits. In a regulatory system pioneered by California and adopted by nine other states, automakers must buy the credits if they fail to sell enough zero-emissions cars to meet mandates. The tally also includes some federal environmental credits.

cComments

• It's worth noting that Tesla has made all of their patents open-source, which isn't trivial. On the other hand, it is my strong opinion that the government should subsidize research, development, and deployment of new technologies. I'd much rather have my tax dollars go to...
  ALEXW1985
  AT 7:06 AM JUNE 01, 2015

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On a smaller scale, SpaceX, Musk's rocket company, cut a deal for about $20 million in economic development subsidies from Texas to construct a launch facility there. (Separate from incentives, SpaceX has won more than $5.5 billion in government contracts from NASA and the U.S. Air Force.)

Subsidies are handed out in all kinds of industries, with U.S. corporations collecting tens of billions of dollars each year, according to Good Jobs First, a nonprofit that tracks government subsidies. And the incentives for solar panels and electric cars are available to all companies that sell them.

Musk and his investors have also put large sums of private capital into the companies.

But public subsidies for Musk's companies stand out both for the amount, relative to the size of the companies, and for their dependence on them.

SpaceX, Elon Musk’s rocket company, cut a deal for about $20 million in subsidies from Texas to build a launch facility there. (Brian van der Brug / Los Angeles Times)

"Government support is a theme of all three of these companies, and without it none of them would be around," said Mark Spiegel, a hedge fund manager for Stanphyl Capital Partners who is shorting Tesla's stock, a bet that pays off if Tesla shares fall.

Tesla stock has risen 157%, to $250.80 as of Friday's close, over the last two years.

Musk has proved so adept at landing incentives that states now compete to give him money, said Ashlee Vance, author of "Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future," a recently published biography.

"As his star has risen, every state wants a piece of Elon Musk," Vance said.

Before his current ventures, he made a substantial sum from EBay Inc.'s $1.5-billion purchase of PayPal, the electronic payment system in which Musk held an 11% stake.

Soon after, he founded SpaceX in 2002 with money from that sale, and he made major investments and took leadership posts at Tesla and Solar City.

Musk is now the chief executive of both Tesla and SpaceX and the chairman of SolarCity, and holds big stakes in all three, including 27% of Tesla and 23% of SolarCity, according to recent regulatory filings. The ventures employ about 23,000 people nationwide, and they operate or are building factories and facilities in California, Michigan, New York, Nevada and Texas.

Tense talks

The $1.3 billion in benefits for Tesla's Nevada battery factory resulted from a year of hardball negotiations.

Late in 2013, Tesla summoned economic development officials from seven states to its auto factory in Fremont, Calif. After a tour, they gathered in a conference room, where Tesla executives explained their plan to build the biggest lithium-ion battery factory in the world — then asked the states to bid for the project.

Nevada at first offered its standard package of incentives, in this case worth $600 million to $700 million, said Steve Hill, Nevada's executive director of the Governor's Office of Economic Development.

Tesla negotiators wanted far more. The automaker at first sought a $500-million upfront payment, among other enticements, Hill said. Nevada pushed back, in sometimes tense talks punctuated by raised voices.

"It would have amounted to Nevada writing a series of checks during the first couple of years," said Hill, calling it an unacceptable risk.

With the deal imperiled, Hill flew to Palo Alto in August to meet with Tesla's business development chief, Diarmuid O'Connell, a former State Department official who is the automaker's lead negotiator.

They shored up the deal with an agreement to give Tesla $195 million in transferable tax credits, which the automaker could sell for upfront cash. To make room in its budget, Nevada reduced incentives for filming in the state and killed a tax break for insurance companies.

Nevada Gov. Brian Sandoval and Musk sealed the agreement in a Labor Day phone conversation. Hill said it was worth it, pointing to the 6,000 jobs he expects the factory to eventually create.

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The state commissioned an analysis estimating the economic impact from the project at $100 billion over two decades, but some economists called that figure deeply flawed. It counted every Tesla employee as if they would otherwise have been unemployed, for instance, and it made no allowance for increased government spending to serve the influx of thousands of local residents.

A $750-million factory

Musk has similar success with getting subsidies for a SolarCity plant in Buffalo, N.Y. The company currently buys many of its solar panels from China, but it will soon become its own supplier with a new and heavily subsidized factory.

An affiliate of New York's College of Nanoscale Science and Engineering in Albany will spend $750 million to build a solar panel factory on state land. SolarCity estimated in a corporate filing that it will spend an additional $150 million to get the factory operating.

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When finished in 2017, the 1.2-million-square-foot facility will be the largest solar panel factory in the Western Hemisphere. New York officials see the subsidy as a worthy investment because they expect that it will create 3,000 jobs. The plant will replace a long-closed steel factory.

"The SolarCity facility will bring extensive benefits and value to this formerly dormant brownfield that provided zero benefit to the city and region," said Peter Cutler, spokesman for Empire State Development, New York's economic development agency.

SpaceX, though it depends far more on government contracts than subsidies, received an incentive package in Texas for a commercial rocket launch facility. The state put up more than $15 million in subsidies and infrastructure spending to help SpaceX build a launch pad in rural Cameron County at the southern tip of Texas. Local governments contributed an additional $5 million.

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Included in the local subsidies is a 15-year property tax break from the local school district worth $3.1 million to SpaceX. Officials say the development still will bring in about $5 million more over that period than the local school district otherwise would have collected.

"That's $5 million more than we have ever seen from that property," said Dr. Lisa Garcia, superintendent of the Point Isabel Independent School District. "It is remote.... It is just sand dunes."

Crucial aid

The public money for Tesla and SolarCity factories is crucial to both companies' efforts to lower development and manufacturing costs.

The task is made more urgent by the impending expiration of some of their biggest subsidies. The federal government's 30% tax credit for solar installations gets slashed to 10% in 2017 for commercial customers and ends completely for homeowners.

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• It's worth noting that Tesla has made all of their patents open-source, which isn't trivial. On the other hand, it is my strong opinion that the government should subsidize research, development, and deployment of new technologies. I'd much rather have my tax dollars go to...
  ALEXW1985
  AT 7:06 AM JUNE 01, 2015

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Tesla buyers also get a $7,500 federal income tax credit and a $2,500 rebate from the state of California. The federal government has capped the $7,500 credit at a total of 200,000 vehicles per manufacturer; Tesla is about a quarter of the way to that limit. In all, Tesla buyers have qualified for an estimated $284 million in federal tax incentives and collected more than $38 million in California rebates.

California legislators recently passed a law, which has not yet taken effect, calling for income limits on electric car buyers seeking the state's $2,500 subsidy. Tesla owners have an average household income of about $320,000, according to Strategic Visions, an auto industry research firm.

Competition could also eat into Tesla's public support. If major automakers build more zero-emission cars, they won't have to buy as many government-awarded environmental credits from Tesla.

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In the big picture, the government supports electric cars and solar panels in the hope of promoting widespread adoption and, ultimately, slashing carbon emissions. In the early days at Tesla — when the company first produced an expensive electric sports car, which it no longer sells — Musk promised more rapid development of electric cars for the masses.

In a 2008 blog post, Musk laid out a plan: After the sports car, Tesla would produce a sedan costing "half the $89k price point of the Tesla Roadster and the third model will be even more affordable."

In fact, the second model now typically sells for $100,000, and the much-delayed third model, the Model X sport utility, is expected to sell for a similar price. Timing on a less expensive model — maybe $35,000 or $40,000, after subsidies — remains uncertain.

"Some may question whether this actually does any good for the world," Musk wrote in 2008. "Are we really in need of another high-performance sports car? Will it actually make a difference to global carbon emissions? Well, the answers are no and not much.... When someone buys the Tesla Roadster sports car, they are actually helping to pay for the development of the low-cost family car."

Next: Battery subsidies

Now Musk is moving into a new industry: energy storage. Last month, he starred in a typically dramatic announcement of Tesla Energy-branded batteries for homes and businesses. On a concert-like stage, backed by pulsating music, Musk declared that the batteries would someday render the world's energy grid obsolete.

"We are talking about trying to change the fundamental energy infrastructure of the world," he said.

Musk laid out a vision of affordable clean energy in the remote villages of underdeveloped countries and homeowners in industrial nations severing themselves from utility grids. The Nevada factory will churn out the batteries alongside those for Tesla cars.

What he didn't say: Tesla has already secured a commitment of $126 million in California subsidies to companies developing energy storage technology.

jerry.hirsch@latimes.com

Twitter: @latimesjerry