Renewables — What Are the Economic Realities?
In response to my white paper on The Tough Realities of Marketing and Sales, a reader points out a few of the economic realities that, in his mind, supersede the points I make in the report. In particular, he notes that there is currently no true market economy for things like biofuels:
All Sustainable businesses have a particular feature: they are always evaluated on a payback or IRR basis. We are in an oil based economy and not on a Sustainable Economy. Biofuels and energy are not marketable by any company but the utilities or distribution companies in each case. You can get biofuels from many technologies, but at the gas station you buy oil, not biofuels. Probably if you look, you will find a huge law on biofuels and how they can be marketed that is everything but compelling for biofuels to be used. Taxes alone make the business tough and customers are wary about using biofuels even in low percentages … Either taxes are on the side of biofuels or they always need incentives and subsidies to be competitive.
The reader goes on to point out that the same lack of liquidity exists for electricity: (more…)