ECONOMICS OF SUBSIDIES
“subsidies build scale. scale enables innovation. that's the point.”
The Lesson
When critics say 'solar will never be economical because it needs subsidies,' they miss the point. Subsidies aren't meant to make something instantly profitable. They build an industry to economies of scale-training workers, building infrastructure, enabling innovation. You can't predict what breakthroughs will happen, but they require scale first. It might take 20 years, and skepticism is fair. But industries with real potential, especially with people like Elon Musk working on them, usually work out. The criticism 'it needs subsidies' ignores that subsidies are the strategy, not the failure.
Real-World Example
A founder hears 'electric cars will never work without subsidies.' They understand: subsidies built the charging network, trained technicians, funded battery research. Now costs have dropped 90% and EVs compete without subsidies. The criticism missed that subsidies were the investment phase, not the permanent state. Same pattern applies to their own business: early losses building infrastructure aren't failure. They're strategy.
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