Solar panels: 1st year’s results

Solar Volt

***NERD ALERT!!!***

I’ve been waiting a year for this: The analysis to see if solar panels were a good idea or not. If you don’t care about the technical details of the math/spreadsheet, just jump ahead to the “RESULTS” section below.

Oddly, it was during the Winter Solstice that our solar panels were turned on, odd because that’s the shortest day of daylight all year long. I’ve been waiting for a year to see where we are, in energy generation, in order to understand if this was a good investment for us. To make it easier for me to analyze our results, I downloaded solar panel data from January 1, 2017 through December 31, 2017. What follows is what I found.

Here’s how our generation went, over the previous year:Solar Generation 2017As expected, there was more energy generated during the Summer than the Winter. It’s pretty simple to understand: The sun is up longer each day, during the Summer (in the Northern Hemisphere), due to the Earth’s axis tilt, in relation to the plane of its orbit around the sun. This was expected and the vendor’s projections showed this was going to happen. The vendor we went with, estimated we’d generate 15,810 kwh per year.

Our average annual usage, over the three years we’ve lived at this residence, is 23,766 kWh per year. In 2017, we used 25,001.974 kWh, or about 5% more than an average year.

Our actual energy generation was 13,408.39 kWh, a 2,401 kWh shortfall, or about a 15% shortfall, from the estimated production our vendor expected. We used 17,477.092 kWh from the grid and sold 5,883.508 kWh back to our electricity provider, Green Mountain Energy. This resulted in a net usage, from the grid, of 11,593.584 kWh. We selected Green Mountain Energy, as our electricity provider, because they buy our surplus generation at the same price that they charge for electricity they sell to us. This seemed to make it easier to do a year-end analysis. They upped our rate from 8.6¢ per kWh to 11.5¢ per kWh for their “Solar Buy Back” plan. Should we have stayed with the lower rate and given them our surplus production for free? There was no way for me to estimate this. Also, they didn’t mention this when we signed up. The salesperson, although we mentioned our new solar panels several times on the phone call and asked about solar buy-back, failed to put us on the correct plan. We were under the impression we were getting the electricity at 8.6¢ per kWh. Two months into the contract, I called to ask why I wasn’t seeing any solar buy-back on our bill. That’s when they realized we were on the wrong plan. I was not pleased to hear this.

Part of the solar panel installation included having a new meter installed. The “smart meter” allowed for electricity to be tracked as it flowed from the grid into our home and from our home to the grid (when the solar panels were producing more electricity than our home was using). Both my electricity provider and I could access this data in a CVS file format, perfect for importing into a spreadsheet for analysis.

At the end of the first year, I downloaded the CVS file and it was GIGANTIC. The original spreadsheet, covering the entire year in 15 minute segments was over 70,000 rows long. generation (solar panel surplus) and consumption (from the grid) were on separate rows. For the purposes of analysis, I combined the two rows for each 15 minute snapshot into a single row, reducing the number of rows to only 35,041 rows. Only?!?!?

My first question was whether the electric company had cheated me by knowing that most people won’t check to see if they actually bought as much surplus as the panels created. The electric company’s website allowed me to see my daily use of their electricity as monthly bar graphs, but did not let me download it as a spreadsheet. I had to click on each day’s bar, in the graph, to see the usage. I then manually entered that day’s value into a new column I added to my spreadsheet. To compare with the 15 minute intervals, I had to add all the increments for a day (96 rows for most days) so that I had comparable numbers. I then added a new column to add those results. I added a test equation for each day to see if what the electric company said we used matched what the smart meter said we used. I also added a column for each day to total up the surplus electricity we generated (if any) for all the 15 minute segments of the day, in order to see what we were selling back to the grid.

After all that work, I found that Green Mountain is a trustworthy company. But there was an issue. The work was so laborious, that I tried copying the equations from one day to the next. Once I had a month’s worth of equations, I tried copying and pasting a month at a time. I felt I must have messed up somewhere because the equations were supposed to end up on the row of the last 15 minute segment for each day, but it didn’t work that way. What had I done wrong???

I fixed the error when it first occurred and then tried copying and painting a month at a time again. When I had completed the year, I noticed the error had occurred a second time! As I scrolled through the data, I found one day where four rows seemed to be repeated, (but the usage values were different) and I found another day where an entire hour was missing. On March 12th, it jumped from 2:00AM to 3:00AM and on November 5th, the hour from 1:00AM to 2:00AM was duplicated. What the hell???

D’oh!!! It was due to Daylight Savings Time starting and ending!

Once I had the spreadsheet completed, I could finally start to evaluate electric provider pricing plans to determine (based on real world data) which pricing plan was most beneficial to us. Here’s what I found. Green Mountain’s Solar Buy Back, even though at a higher kWh rate, saved us about $21 per month, over the lower rate that did not buy back surplus energy.

My next stop was Texas’ Power To Choose website. In Texas, electricity providers are, by law, broken up into three groups: power generation, power delivery and power retailing. In my case Green Mountain Energy was my electricity retailer. Oncor is the company that maintains the power lines and is paid by the kWh to transfer electricity from the generation plant to my home (this charge is added to my electric bill from the retailer). Green Mountain, in turn buys electricity from the power generation plants. This split of the industry has increased competition and helped keep costs lower than in other areas of the country, but also makes it difficult for EV charging networks, because they cannot sell electricity, by the kWh, to the end user. They have to charge by the time your EV is plugged in. This means slower charging EVs are penalized. They may get the same amount of electricity, but pay more because they are connected longer to get it.

I knew of companies, like TXU, that offered time-of-use plans, giving the consumer a lower price at night (when grid demand is lower) than during the day (when demand is higher). This called for a new section of the spreadsheet, where I could differentiate between night kWh and day kWh. I checked the TXU website and found that the customer can pick one of three start times for the night rate. The duration of the night pricing would be the same, eight hours. At night, TXU’s electricity is free but, during the day, their price per kWh is higher than companies that don’t differentiate between day and night rates. The new section of the website would allow me to analyze this to compare electric rates. Unfortunately, the free nights plan does not buy my excess solar generation, so that had to be taken into consideration as well. As I read about the TXU plan, after adding the new section to the spreadsheet, I realized their electricity is 90% from non-renewable sources, so that plan would not work for us. It was the lowest priced plan I evaluated with the spreadsheet, besting our Green Mountain plan by about $32 per month on average.

I continued to search for electricity providers on the Power To Choose site, looking for companies that offered time-of-use plans that sourced their energy from renewable sources. There was only one: a company named “Volt.” Imagine that! Volt designates twelve full hours at night rate, but it’s 9:00PM to 8:59AM. The consumer cannot pick the start time. Their night energy is not free, but is at a lower rate than daytime. So, once again, it was time to add functionality to the spreadsheet. This proved to be higher than our Green Mountain buy-back plan by about $$5 per month. This meant that, without the ability to predict production or day/night balance, we had selected the best plan that also provided 100% renewable energy, when provided by the grid.

Adding this spreadsheet capability gave me more insight into my electricity usage as well as the ability to compare these providers to one another effectively.

RESULTS

As I mentioned before, solar panels generate more energy in the Summer than Winter, because the sun is visible much longer then. Here’s the breakdown of our energy usage from the grid and from the panels, by month:Solar vs Grid by MonthIt is also important to have your panels facing south. The front of our house faces south, but as you can see in the first picture in this post, the roof does not slant down toward the front of our house. This means each bank of panels only produces near full capacity for about half of each day.

As you can see from the chart above, both total usage and solar generation were highest in the Summer. Our heating system uses natural gas, so our electric usage drops precipitously in the Winter. Here’s the numbers:Energy Results TableSolar vs Grid pieThe far right column shows the percentage of solar versus grid energy used. The peak for solar percentage was 72.5% in April, when mild temperatures and sunny days kept energy demand low and production of the panels high. The worst performance was 35.5% solar in December, when skies were often cloudy and colder temperatures meant our electric mileage of our Volts was low, so electric demand for charging was greater. How these two sources would compete, month by month was a mystery to me, until I had the data in hand. Of course, this was after I’d had the panels for an entire year, so this insight came too late to help inform our decision on whether to add the panels or not. Another bit of data gleaned: I could see exactly how the two sources of power ranked. 54% of the electricity we used came from the solar panels and 46% from the grid (by kWh).

Day vs Night pieThe day/night section I added to the spreadsheet allowed me to easily see when we use electricity and it was a real eye-opener. Unlike most people, in Texas, our energy usage is biased to nighttime use. We have up to three Chevy Volts charging at night and those can account for over half of our total usage, on some days. This makes the time-of-use plans look very interesting. It also means we should possibly be evaluating battery storage, in the event we select a plan that doesn’t offer surplus energy buy-back.

So finally I had come to the moment of truth: Was it a good idea to go solar or not? To get to the answer, I created yet another table that analyzed the financial side of this. There were basically a few things to compare:

  • The actual cost over the last year, compared to energy purchases without panels,
  • Comparing time-of-use plans to energy purchases without panels,
  • Comparing time-of-use plans to plans with or without solar surplus buy back.

Here’s that table:Financial ResultsHere’s what you’re seeing in the table above:

The first three rows are are the price to buy electricity, the price the electric company pays for surplus energy generated by the solar panels (which can be zero for some companies) and the price I’d be paying if I did not have the solar panels.

The next four rows (blue & yellow background) are the day and night prices for a company that offers time-of-use pricing and the start and end times for the night pricing. Those companies typically do not have a buy-back of surplus energy.

The next four rows are how the year actually went in kWh usage as well as the costs associated.

The next two rows (blue & yellow background) are the costs involved with time-of-use providers.

The “Cost For Solar Panels” row is the monthly payment for our solar panels, after applying the 30% Federal Income Tax Credit. This payment has to be taken into account, as a cost of energy used, if I’m being completely honest with myself (and you).

The next line is interesting. In Texas, adding solar panels to a home, on average, increases the value of the property by $15,000 but the state does not tax that additional property value. This tax savings has to be considered as a reduction to my costs and therefore an energy savings. The $15,000 increased value, in my opinion cannot be considered, since it won’t be realized, until we sell our home and move away.

GME std plan vs. solar buy backAs can be seen in the partial table above, we are paying $76.05 more for electricity, per month, than we did without the solar panels. For all the comparisons below, I am using the non-solar panel plan from Green Mountain, so everything, including our last year’s results, are being compared to the same benchmark. The tax savings amount to $35 per month, reducing this deficit to $41.05 per month. The cost of the solar panels, after tax credit, was $23,436, which we financed over their 20 year warranty period.

Next, I compared The free nights from TXU. There are three possible start times, 8PM, 9PM or 10PM. All have 9 hours of free energy. All three plans would cost us more than Green Mountain’s current non-solar rate by $104.56, $113.44 and $121.72, respectively. Since the buy-back plan is only $76.05 over the non-solar plan and because TXU’s plan is only 10% renewable energy, this is a non-starter for us. (see below)

8PM start:

TXU Free Nights 8PM

9PM start:TXU Free Nights 9PM

10PM start:TXU Free Nights 10PMNext up is Volt’s reduced price nights plan, which uses 100% renewable energy. Even this plan is more expensive than Green Mountain’s solar buy-back, by about $6 per month.Volt plan

Are you starting to see why I love my spreadsheet? 😉 With this tool, I will be able to realistically compare plans, based on our actual usage scenario. These plans used to be completely opaque to me.

Part of the expected payback is the expected rise in the cost of electricity. Only time will tell if that comes to pass. When we first selected Green Mountain Energy as a 100% renewable energy provider, about 15 years ago, we paid a premium for their product. In time, it became competitive and I feel the early adopters, like us, helped Texas become the number one state in wind-generated electricity. Once again, I’m on the bleeding edge, and am proud to be so.

P.S. I am now very interested in battery backup technology for my solar panels…once they become more affordable. I’m also considering adding more panels when they come down more in price.

Taxing rumor mill…

CongressSeveral sites are quoting an unnamed Republican and announcing that the Federal Income Tax Credit for plug-in vehicles will be retained in the “reconciliation” bill.

For those unfamiliar with how our legislative process works, here’s a quick intro:

  • Lobbyist proposes a change to current law or a new law
  • Trench-coat-garbed smoking men meet in darkened public parking garage to exchange money and verbatim text of proposed law.
  • Congressperson enters new law as a bill.

(just kidding…I hope…)

  • The Senate and House both propose bills, in this case a tax reform bill.
  • Both the House and Senate committees debate and pass (or fail to pass) the bill from committee.
  • The bill is heard by the respective chamber and the entire chamber votes on the bill.
  • If the bills pass both the House and the Senate, someone has to iron out any differences, so that a singular, unified bill goes to the President’s desk for signature. This is done by a “reconciliation committee,” that makes compromises needed to assure passage through both chambers.
  • Both chambers vote on the reconciled bill.
  • If the reconciled bill passes both chambers, the bill is sent to the President for signature, making the bill the law of the land, or veto.

The big news for the last several weeks, in the EV world, is the House of Representatives had a clause, in their version of the tax reform bill, that eliminated the income tax credit, effective this December 31st. The Senate version kept the tax credit in place.

The first rumor I saw was that the reconciled bill contained the House’s wording, eliminating the tax credit.

Now, the latest rumor is exactly the opposite. Many sites are proclaiming the tax credit is saved.

My advice is unchanged: If you were considering the purchase or lease of a plug-in vehicle and the income tax credit was a major factor in the decision, do the following:

  • Do NOT trust. Verify. If there is no public announcement before January 1st, consider pulling the trigger on your acquisition instead of taking the risk of not getting the tax credit.
  • KEEP up the calls, emails, letters, tweets, Facebook posts, petitions, etc to your elected official up. Do NOT release the pressure, until we know the tax credit has been preserved!
  • Of course, if it is announced the tax credit is ending, I recommend taking advantage of it before year’s end. I wish I could do the same, but my current Volt lease doesn’t end until March 2019.
  • Of course, if both houses prematurely end the tax credit, vote against every single incumbent, regardless of party, in the next couple elections. Only then, will they remember who their bosses are and that they are in a subservient role.

Giving America’s future to China

The big news in the EV business for the last month or so has been tax reform. The House of Representatives passed a new tax bill that eliminates the Federal Income Tax Credit on plug-in vehicles. Fortunately, the Senate is working on their version of the tax bill, which (at this time) retains the tax credit. If the Senate version passes, as is, it’ll be decided in conference committee, behind closed doors without us having a say in the matter. As displeased as I have been with the methodology of the tax credit (see this and this), I believe it is absolutely essential to keep it, so we do not trade away America’s leadership in EVs.

For a little background: My career began in manufacturing, specifically oil field manufacturing. I worked for wellhead and down-hole manufacturing companies from 1976 to 1985. In 1984, the price of oil collapsed, devastating the industry. My home town, Houston was brought to its knees. A huge number of people lost their jobs and their homes. When I got laid off, I had to move to the Dallas/Fort Worth area to find work and was fortunate to find it. I left the oil patch and worked as a manufacturing engineer for a printing press manufacturer and after three years, transitioned into the software industry. I was the technical member of a sales team that offered computer-aided design and manufacturing (CAD/CAM) solutions, across many different industries. I eventually left that field to go back into manufacturing engineering in the aerospace and defense sector.

During my entire career, in manufacturing, I read about the decline in manufacturing jobs in the U.S. The primary issue was, as global communication and transportation became more inexpensive, manufacturing shifted to emerging markets in Asia and South America and Mexico. Wages were much lower there, and factory automation reduced the skill level required to produce products. Only the products most difficult to manufacture, or seen as a strategic priority (military) continued to thrive in our country.

Americans seem to have difficulty with long-term memory. In World War II, American automobile manufacturers produced aircraft and tanks. The domestic strength in manufacturing was one of the reasons we prevailed. Today, those same companies are global, with parts (and entire vehicles) produced overseas. Our continued desire for big SUVs, trucks and cars illustrates that we’ve forgotten when OPEC crippled our economy (twice). Today, OPEC is weaker and is not perceived as a threat. Saudi Arabia recently announced a shift away from an oil-dominated economy and will focus more on global finance (thanks to the tons of money earned by selling their oil to the world). The Saudis have read the writing on the wall and are responding appropriately. That’s one of the strengths of a state guided by a monarchy.

If only our government had the same foresight.

Unfortunately, our democracy, due to what appeared to be minor tweaks in our tax laws, over decades, has become an oligarchy. Money, rather than individual votes, rules the day. The loss of manufacturing jobs meant a loss of union influence because there were fewer and fewer middle-class people employed in manufacturing. In my early career, I got a new job offer monthly and my employers knew this. My wages increased regularly. I felt secure in my job and could save and invest in my family’s future. Today, wages are stagnant. As a result, I moved to a career in sales. This allows me to have some control over my earnings and my future, but nowhere near the security I felt back in the 70’s and early 80’s. The recession, after 9/11, ended my career in software. The reckless gambling, by mortgage bankers, that caused the global recession in 2008 (which lingers to this day) destroyed my retirement savings. However, the bankers and investment houses have worked to minimize the effect of legislation to curb their behavior and are working to undo the last of the changes enacted to prevent future irresponsibility.

America leads today in two industries, which arguably started here: electric vehicles and the internet.

The internet gave the ability to publish to even the smallest organization or even individuals. My blog is an example. My words and opinions have been shared with literally thousands of people, around the world and allowed me to share thoughts about things important to me.

Much more importantly, it has enabled those being oppressed by tyrants to share their plight with the world. We’ve seen people rise up, with a united voice, in lands where small groups would have been snuffed out quickly. We’ve seen light shine, just this week, on slave auctions, things we thought were from the distant past. Now, the monied interests are plotting to end Net Neutrality so that only those with wealth can have a voice and only those willing to pay extra can search for the truth about the world in which we live. The Internet started as a DARPA-funded project, paid for by the tax payers. Now, the politicians are going to see to it we have no voice.

Electric cars started, over a century ago, in the U.S. Gasoline, with a better capacity to store energy (back then) came to dominate transportation and our nation grew and thrived, due to it. However, times, and technologies, change. A new way is being pioneered by Tesla Motors, General Motors, Ford Motor Company and yes, Nissan. I’ve written before about the countries that have stated their intention to end gasoline-powered cars, within their borders. We can lead the way and have those countries buy our vehicles or we can ceded our lead and watch other countries continue to develop ideas that came to fruition here. China represents more than 1/3 of the global market for vehicles. They will move to cleaner forms of transportation. If they have to, they’ll develop their own vehicles and we’ll be buying Chinese cars a decade from now. They’ll use the old smoke screen of “letting the free market decide the winners,” while ignoring the fact that our tax dollars subsidize the fossil fuel industry to the tune of billions of dollars a year.

Want a level playing field so the market can decide? Fine. End all subsidies for renewable energy and fossil fuels. Let the chips fall where they may. If the gutless politicians don’t have the testicular fortitude to pull our tax money from their masters, they sure as hell shouldn’t cripple our nation, as they line their pockets.

As we say in Texas, we all have a dog in this fight. Let your elected officials know exactly where you stand on these critical issues.

Dark clouds on the horizon.

IRS logoAccording to an article posted by Green Car Reports today, the Federal Income Tax Credit for plug-in vehicles may be in danger of being eliminated prematurely. Based on the picks that have been made to head up departments like the EPA, Department of Energy, etc, this could be a very real threat.

There are two courses of action:

  • If you’ve been considering a plug-in vehicle, you may want to purchase or lease one before the end 2017.
  • If you’re opposed to this action, contact your elected representative and make your voice heard!

Book review: Dark Money

Dark MoneyWant to get really depressed? Have I got a book for you!

Jane Mayer’s “Dark Money,” is a thoroughly researched, very detailed account of how small, tactical changes to laws have changed politics in our country. At a time when Americans are deeply disgusted with politics, it’s an interesting and important book.

I realize both sides of the political spectrum are using dark money to manipulate the masses and to frame today’s political discourse, but this book really explains how it has been done. It describes how our democracy has been stolen from us, with our approval. It explains how we, as a people have become so polarized, but more importantly, who (at least in the case of conservatives) is behind it and why.

The names involved include a who’s who of current political events, like Charles and David Koch, The DeVos family, Karl Rove, Dick Cheney, Mitch McConnell, as well as other names familiar to you.

My interest is in the current climate change debate and how we went from a point where the majority of Americans believed the scientific consensus to the current point of constant debate. Make no mistake, the same firms that confused the public about whether or not tobacco was harmful were involved in creating the confusion about global climate change. In fact, their slogan was “Doubt is our product.” And who pays these firms for their work? Why those who have been fined millions upon millions of dollars for damage to the environment and see rules preventing them from doing this as infringements on their freedom. Those who, to make an extra $7 million, reopened a gas pipeline they knew to “leak like swiss cheese,” killing two teenagers, when it exploded, resulting in a $298 million dollar civil judgement against them. Those whose employees, when they reported dumping of MERCURY onto the ground near rivers, were terminated for reporting the crime to management or the authorities. One instance of mercury dumping poisoned the fish for fifty miles downstream and made it into people who unknowingly ate those fish.

Did you know your politicians created a law allowing the very wealthy to place their children’s inheritances into trusts, where if the funds remained untouched for twenty years and the interest earned was donated to non-profit organizations, became a tax free inheritance? That doesn’t sound so bad, until it is uncovered that those same rich people created their own non-profit organizations which then distributed the interest earned to political campaigns, via donations to other non-profits, which removed their fingerprints from the funds. Some of the schemes were described by the officials trying to investigate them as “Russian nested dolls.”

It is one thing to confuse smokers into believing that the product they’re using isn’t killing them. That affects the users of tobacco and their families, but leaves the rest of us unscathed.

It is quite another thing to confuse the public into believing in “clean coal” or that global climate change is a “job killer” or is an evil plot by liberals to redistribute wealth from “doers” to “takers.” In this latter case, we all lose if we kill the planet.

Again, I believe both sides are doing this and the media is complicit, focusing on false “outrages” to keep the people of America distracted.

When will we wake up?

Will it be too late?

Where are the true statesmen/women?

Tax planning

IRS logoAs we’re about to enter the final quarter of the year, thoughts turn to the holidays and then…tax season. This year and next planning is especially important. The three top producers of plug-in vehicles, that qualify for the full $7,500 Federal Income Tax Credit for all-electric and plug-in hybrid vehicles will probably hit their 200,000th unit sale in 2018. Depending on the modeling you employ, this could start happening as early as mid-year or closer to the end of 2018.

For the uninitiated, there is an income tax credit for those who buy (not lease) all-electric and plug-in hybrid vehicles. But not all vehicles get the same tax credit. The amount of the tax credit is determined by the size of the battery pack. Also, it is important to understand the difference between a tax deduction (like the deduction for having a child, property taxes paid or mortgage interest paid) and a tax credit.

A tax deduction is a deduction off your income, so if you have a deduction, with a value of $2,000, it reduces your taxes by the deduction multiplied by your tax rate. It’s a little more complicated than that, due to how tax brackets affect the calculations, but this example is close enough for horseshoes or hand grenades. If your tax bracket is 25%, the tax deduction of $2,000 only reduces the taxes you owe by $500 ($2,000 X 25%).

A tax credit actually reduces your income tax by the stated amount of the credit. So, in the example above we used a value of $2,000. A tax credit would of that amount would reduce your taxes by $2,000. Easy, peasy. There are some other considerations, so consult your tax preparer.

The plug-in vehicle income tax credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which the 200,000th of their plug-in vehicles has been sold. Qualifying vehicles from that manufacturer are eligible for 50 percent of the credit ($3,750) if purchased in the first two quarters of the phase-out period and 25 percent ($1,875) of the credit, if purchased in the third or fourth quarter of the phase-out period.  After that point, the credit goes away completely.

Who are the three manufacturers that will be affected first? They are Nissan ( maker of the Leaf), Tesla Motors (maker of the Roadster, Model S, Model X and Model 3) and General Motors, (maker of the Cadillac ELR & CT6, Chevy Volt, Bolt EV and Spark EV).

So, in planning your taxes, if you want to make a purchase in 2017 and collect the tax credit when you file in 2018, you need to be working on that purchase now. If you want to order exactly what you want, it’s too late for a Tesla, since their waiting list is so long. For the current GM models, you should place your order no later than October 15th, as it usually takes eight weeks from order to delivery (depending on dealer allocation). Unfortunately, I do not know what the order cycle is for the newly redesigned Nissan Leaf.

If you want to make a purchase in 2018 and collect the tax credit when you file in 2019, you need to keep an eye on how the manufacturers are each progressing toward the 200,000 vehicle limit. As of last month, it shaped up like this:

  • Tesla Motors – 138,469
  • Nissan – 113,263
  • General Motors (Cadillac and Chevrolet) – 149,649

The Tesla numbers were based on estimates. I will endeavor, over the next year, to keep an eye on this and post my findings here.

Will the EV income tax credit punish the pioneers?

We’re approaching the 7th anniversary of mass-produced plug-in vehicles. Although the $7,500 income tax credit was expected to get 1,000,000 plug-in vehicles on the road quickly, we’re only about 2/3 of the way there, in the U.S. market. As of the end of last month, there were 686,192 plug-in vehicles that had been sold, in the U.S. Every single year, sales have increased. We are on track this year to possibly hit the 200,000 unit mark for the first time in a single year (depending on how December goes). December, due to year end sales promotions and the nearness to tax time, is always a very high production month.

This got me thinking about the pioneers and the stragglers.

The tax credit begins to go away, once a manufacturer sells their 200,000th plug-in vehicle. Three manufacturers are already well over 100,000 units sold: Tesla Motors, General Motors and Nissan. These are the manufacturers that paved the way for all the newcomers we’ve been reading about, with great expectation. However, they may be punished for their risk taking. When these three manufacturers hit the magic 200K units, the newcomers will have a distinct price advantage, as their customers will still be able to get the full tax credit, while the customers of the more established PHEV manufacturers will suddenly lose half the tax credit, a few months later 3/4 of it and shortly after that, all of it.

My question: Was this the strategy of the stragglers?

In the darker places of my mind, I can see a boardroom, where the executives are saying, “Let them take the risk! We can sit back and see how things develop. If PHEVs take off, we’ll be late to the game, but we won’t have paid the price of educating the consumers about them. Better yet, when the other guys lose the tax credit, we’ll have an amazing price advantage over them, giving us a huge leg up, into the market!”

I have complained about the implementation of the tax credit before. There were so many ways it could have been a much better tool to stimulate sales. It probably would have been a better stimulus, if the tax credit had been available until the total sales of all PHEVs in the U.S. reached a benchmark. For instance, if the goal of one million PHEVs had also been used as the end of the tax credit, the incentive would be to ramp up production much more quickly. To the bold would go the spoils! Stragglers would have the same tax credit available, but by dragging their feet, fewer of their vehicles would have qualified for it, because the pioneers would have gobbled much of it up. There would have been a race to produce quickly. Instead, we seem to have incentivized caution and failure to innovate.

I’m proud of the risks taken by the Big Three of PHEVs, but I am concerned about how they’ll fare, once they lose the tax credit and have to compete with competitors who have prices thousands of dollars lower than what they can successfully provide.

Disclaimer: I have had five Chevy Volts in my household. I love the Volt & Bolt EV (and Spark EV, Cadillac ELR, Tesla Model S, etc) so much, I changed careers to promote them. Part of my concern is definitely self-serving: How will I be able to sell, once the playing field is so badly tilted against me?