Yves right here. Solely now’s the media taking a lot discover of the truth that many photo voltaic rooftop gross sales had been designed to create monetary property, not a product. The US has a proud historical past of this form of factor. The nineteenth century railroad-building increase occurred to create inventory providing, not rolling inventory. They went bankrupt in droves regardless of the obvious utility of getting rail traces. However railroads have enormous mounted prices and relatively low marginal prices. Many of those railroads competed with one another. In order that they’d routinely get into profit-wrecking value wars.
Reader Quarterback gave clarification of 1 scheme in feedback:
Re photo voltaic trade article, I keep in mind when the photo voltaic increase was rolling by means of my space round 2010. A coworker raved about his “candy deal” to get photo voltaic panels put in at his house “without spending a dime” (which was truly “no cash down”). He gave me a replica of his contract in order that I may contemplate it for myself.
The (very lengthy) contract included a clause to commit to buy a set minimal quantity of electrical energy at a set value, (albeit at a cheaper price) for the time period. This pricing included modest will increase over time. The gross sales speaking level was “electrical costs are by no means going to go DOWN”. The issue was that the contract made it clear that there was no solution to get out of this dedication, so if your own home burned down, or in the event you took a protracted trip, you might be nonetheless obligated to purchase the electrical energy. It even had a clause that saved you on the hook if the property was bought. You can switch the contract over to a brand new purchaser, however provided that authorised by the photo voltaic firm.
It was apparent to me that the entire level was to create an electrical energy futures automobile that would then be bought (nearly instantly) to mounted earnings traders.
An extra concern I had was how succesful would the photo voltaic firm be to satisfy its obligations within the out years after it had transformed these vitality futures into fast money, which might probably exit the books as exec bonuses? Photo voltaic panels usually have an efficient lifespan of 20 years, so at finish of life, would the corporate even have the cash to get rid of the outdated panels (that are thought-about poisonous waste as a result of heavy metals)?
A part of the economics of the deal included the idea that the electrical energy generated by the photo voltaic cells could be resold to the grid to offset the owners prices. The issue is that on the best way to finish of life, the effectivity of photo voltaic panels drops in a short time over just a few years.
I declined to leap on board.
By Thomas Neuburger. Initially revealed at God’s Spies
An AI-generated depiction of rooftop photo voltaic
“All markets will do is create incentives to cheat.”
“The issue is to get individuals to subordinate themselves to The Market. That is referred to as ‘freedom.’”
“What concerning the American political system requires billionaires be paid earlier than something good happens?”
An necessary piece by Cory Doctorow makes a number of necessary factors: about AI “reward hacking,” rooftop photo voltaic, and Wall Road. Let’s take a look at every, and talk about a further level — the rationale all this occurred.
The article begins:
Photo voltaic is a marketplace for (monetary) lemons
Rooftop photo voltaic is the long run, but it surely’s additionally a rip-off. It didn’t must be, however America determined that one of the best ways to roll out distributed, resilient, clear and renewable vitality was to let Wall Road run the present. They turned it right into a rip-off, and now it’s in horrible hassle. which suggests we are in horrible hassle.
That units the stage.
AI and Reward Hacking
If you happen to watch the video beneath, you’ll study that AI solves issues with out understanding something about the issue however the literal downside itself.
That results in what Bruce Schneier referred to as “reward hacking.” Right here’s Doctorow’s clarification:
For instance: in the event you use an AI to provide you with a Roomba that doesn’t bang into furnishings, you would possibly inform that Roomba to keep away from collisions. Nevertheless, the Roomba is simply designed to register collisions with its front-facing sensor. Flip the Roomba unfastened and it’ll rapidly hit on the tactic of racing across the room in reverse, banging into all of your furnishings repeatedly, whereas by no means registering a single collision[.]
And right here’s a video explaining the identical idea:
Perhaps AI will kill us as a result of it’s so dumb.
However Doctorow’s piece isn’t about AI. It’s about companies and the way like AI they’re, in all of the worst methods.
Each Ted Chiang and Charlie Stross have theorized that the supply of those anxieties isn’t AI – it’s companies. Firms are these equilibrium-seeking complicated machines that may’t be programmed, solely prompted. CEOs know that they don’t truly run their corporations, and it haunts them[.]
Within the following, be aware the pivot within the center, from AI to “markets.”
Stross calls companies “Gradual AI,” a pernicious synthetic life-form that acts like a pedantic genie, at all times on the hunt for methods to destroy you whereas nonetheless strictly following your instructions. Markets are an especially dependable solution to discover essentially the most terrible alignment issues – however by the point they’ve surfaced them, they’ve additionally destroyed the factor you had been hoping to enhance along with your market mechanism.
Firms are pernicious AI, based on this evaluation. They’ve minds (or non-minds) of their very own, that solely search objectives. Within the company case, the purpose is “take advantage of cash.”
Like AI, companies, fed by no matter is depraved in its executives, will discover the least ethical manner to do this, as a result of morality (“Thou shalt not kill”) is all about brakes, and companies are all about flooring the accelerator.
Financialized Photo voltaic
The primary level of Doctorow’s piece is rooftop photo voltaic; particularly, financialized rooftop photo voltaic:
The issue begins with a fairly frequent finance puzzle: photo voltaic pays off large over its lifespan, saving the home-owner cash and insulating them from price-shocks, emergency energy outages, and different horrors. However photo voltaic requires a big upfront funding, which many householders can’t afford to make. To resolve this, the finance trade extends credit score to owners (lets them borrow cash) and will get paid again out of the financial savings the home-owner realizes over time to come back.
However all this trusted owners truly desirous to spend the cash. Which they didn’t, not on adequate amount to fulfill the federal government purpose of accelerated rollout. So the federal government created subsidies that owners may get. The concept was, these subsidies would gas the market demand for the finance industries loans.
The federal government created subsidies – tax credit, direct money, and mixes thereof – within the expectation that Wall Road would see all these credit and subsidies that on a regular basis individuals had been entitled to and go on the hunt for them. They usually did! Armies of fast-talking sales-reps fanned out throughout America, ringing dooorbells and sticking fliers in mailboxes, and mendacity like hell about how your new photo voltaic roof was gonna work out for you.
As with the subprime mortgage market, the place the poisonous loans had been was funding autos (derivatives), so was photo voltaic indebtedness financialized. Why it is a downside, and what sort of downside it’s, is greatest defined by pointing to this hard-titled piece in Time: “The Rooftop Photo voltaic Business May Be on the Verge of Collapse.”
A decade in the past, somebody knocking in your door to promote you photo voltaic panels would have been promoting you photo voltaic panels. Now, they’re most likely promoting you a monetary product—probably a lease or a mortgage.
Mary Ann Jones, 83, didn’t notice this had occurred to her till she obtained a name final 12 months from GoodLeap, a monetary know-how firm, saying she owed $52,564.28 for a photo voltaic panel mortgage that expires when she’s 106, and prices greater than she initially paid for her home. […]
The least ethical solution to roll out rooftop photo voltaic.
The International Neoliberal Challenge
Doctorow accurately identifies the answer: “If governments are keen to spend billions incentivizing rooftop photo voltaic, they will merely spend billions putting in rooftop photo voltaic – no Gradual AI required.”
However let’s go one step farther. The first purpose of neoliberalism and what we should name the Neoliberal Challenge is “making a world economic system the place entrepreneurs may let their fortunes bloom unimpeded by adverse authorities intervention.” Nothing will get in the best way of constructing more cash.
Philip Mirowski has since stated that neoliberalism developed from that — authorities not impeding profit-making — to creating certain the federal government actively promotes the “blooming” of fortunes.
So we are able to ask, paraphrasing Doctorow, “if governments are keen to spend billions incentivizing (enriching) the wealthy, why can’t they spend the identical on the precise purpose?”
The reply is straightforward — the worldwide Neoliberal Challenge, the place the one purpose of presidency is to counterpoint the wealthy, and every thing else is second.
Or put otherwise: What concerning the American political system requires billionaires be paid earlier than something good happens? The reply: The system doesn’t exist for you. As a result of freedom.
If you wish to know why your grandchildren could possibly be hunter-gatherers — and their mother and father as properly — lengthy earlier than they die, you’ve simply learn the rationale. Billionaires and the mission that sustains their wealth.
Cory Doctorow is combating one other warfare, to provide an audio e-book that’s not chained to Audible. If you wish to assist, click on right here.