[ta1243]

People nowadays expect 10% return on their investment, so if you invest 1m you need to make 100k a year from it (120k to cover the deprecation over 50 years)

If you made 30k a year for 50 years you'd return 1.5m from your 1m investment, but you're only making 3%, which is a low return especially given the future risk (you'd have to run for 33 years just to get your initial investment back)

Either way it's worthwhile, because the reason people expect 10% is because the externalities are borne by others. Majority of people and countries in the world do not deem ROI to be the sole or even primary driver for investment, and judging investments only on the immediate financial reward already biases the conversation

[Avamander]

> Majority of people and countries in the world do not deem ROI to be the sole or even primary driver for investment

It's partially that, other part is that we aren't really pricing in all the externalities of everything out there. So it's not that "there's no ROI", it's that "we aren't factoring things in the ROI calculation".

So while a heat battery might not make a huge profit, the ability to burn less fuel (less air pollution, less waste, etc), to offer redundancy and stability, the know-how and work it creates, that is all valuable as well.

[hliyan]

Externalities can (and should) be priced in by taxes that offest negative externalities (e.g. carbon emissions, pollution). Unfortunately, legislative bodies that have to decide on taxes have a much cozier relationship with industry than they do with those who must endure the effects of negative externalities (the general population).

[ta1243]

Put a carbon tax on fuel in a western country and you end up with an unhappy population who pay more money in tax. Personally I'd distribute the revenue as a UBI which would mean the most polluting would be worse off but the average person would be better off.

The people who would mostly benefit from reduction in emissions - especially in the short term - are those in other countries. It's not going to be Finland suffering the most from doubling of the cost of food from failed harvests, it's going to be massive failures in rice harvests in south east asia. Finns will always be able to outcompete the average Cambodian when buying food.

One of the costs of emissions to western countries - say Spain - is increased bad weather - more frequent storms, fires etc. All fairly small stuff compared with mass starvation or water shortages though. That starvation leads to another problem -- increased migration pressure.

But those costs are going to be borne anyway. Even if Spain stopped emitting CO2, it wouldn't make an ounce of difference. International agreements have failed time after time to curb emissions.

The main benefit of renewable energy for a given country isn't the reduction in emissions, it's the increase in energy independence - no need to import gas or oil from unstable countries.

[strken]

It's possible and often desirable to calculate the estimated impact of externalities, positive and negative. Human lives are (in)famously given a monetary value by environmental agencies to enable this calculation.

I think the more likely explanation is that this is a pilot project by a clean energy startup, it intentionally operates at a loss because it's RnD rather than mature tech, everyone involved is okay with this, and the company doesn't want to release its modelling of future ROI because that's valuable proprietary data and giving it away to clients and competitors is dumb.

[kragen]

> Majority of people and countries in the world do not deem ROI to be the sole or even primary driver for investment

I think this is a little unfair. If it were true, it would be the reason for wealth inequality: you're saying that the majority of people and countries are so financially irresponsible that they consume any resources they get without investing any. But in fact everyone I have observed closely, in every socioeconomic group, tries to optimize ROI. Most of them aren't very good at it, but they do try.

On the other hand, people who expect a 10% risk-free return are just going to get scammed. There are 10% opportunities in most people's lives—weatherstripping, coupon clipping, bulk food buying, etc.—but you can run out pretty quickly.

[ta1243]

> There are 10% opportunities in most people's lives

Average S&P total return (reinvesting dividends) is well over 10% over any appreciable timeframe (say 30 years), even during really low times (say buying at the peaks in 1999 or 1972)

[zahlman]

The long term average is a bit over 10%, but there are definitely 30-year periods that have fared worse than that.

[ta1243]

Which specific 30 year period?

[kragen]

If we restrict our attention to the cherry-picked-with-hindsight US stock market, the worst 30-year period would probably be 01929 to 01959, although 01903 to 01933 isn't that great either. The S&P 500 only goes back to 01957, but https://www.econstats.com/eqty/eq_d_na_4.csv shows the DJIA at US$382.01 on 01929-09-05. 30 years later, on 01959-09-04, it had reached US$653.91. That's 1.8% return per year, which is lower than 10%.

But wait! Those are nominal numbers, not inflation-adjusted numbers. And the dollar had lost nearly half its value over those 30 years! According to https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=382.01&year1=1..., US$382.01 in September 01929 would be worth US$646.99 in September 01959. So the inflation-adjusted return was 0.035% per year. At least it's not negative! And that doesn't even include the dividends!

Nowhere close to competitive with insulating your house or bulk-buying food, though.

[kragen]

That's cherry-picking a single country's stock market with the benefit of hindsight, though. Over the time frame you're talking about, that country became the world's sole superpower and also underwent an unprecedented redistribution of income from workers to investors. Neither of those things can happen again in the US, they aren't very likely to happen anywhere else, and if you had invested at those points in time, you wouldn't have known they were going to happen. If investors had known they were going to happen, they would have bid the price up higher earlier on.

And of course it isn't a risk-free return.

Consider what happened to investors in Germany, Hungary, or Romania in the 01930s, or South Vietnam in the 01960s, or Afghanistan in the 01970s, or Iraq in the 01990s.

You might think this is irrelevant because you don't live in 01930s Germany or 01970s Afghanistan or 01990s Iraq; you live in the USA.

But, if you live in the USA, you don't live in the USA of the 01970s or the 01930s. You live in the USA of 02025. In 02025, the country most like 01930s USA or 01970s USA is China, which is obvious if you read books from the USA from those periods. The USA in 02025 is the country that's been trying and failing to build high-speed rail for 60 years, since Japan got it working, and just elected a xenophobic demagogue who praises dictatorship; it's much more like 01980s Russia or 01930s Italy.

Warren Buffett said that, in the long run, you can't expect the stock market to return more than the long-run economic growth rate, which you can't expect to consistently be more than 3%. I don't understand the logic behind either of these propositions, but I suspect Buffett knows more about market returns than I do.

— ⁂ —

By contrast, if you can get an 0.8% discount on the potatoes your family eats by bulk-buying enough potatoes for the next three months, that's about a 10% annual return on investment, and the risk is pretty low—and almost entirely under your control. And, in practice, you can often get a much bigger discount than that, especially if you assign some cost to the errand of going potato shopping. You just have to make sure you have proper potato storage and that you don't have a sudden dropoff in family potato consumption.

How do I figure that ROI? Well, the amount of extra money you have tied up in potatoes oscillates between two months' worth and zero, with an average of one month of potatoes. But your expenditures on potatoes are 0.8% less each month, which is your earnings from that investment. Every year, you save 10% of a month of potatoes: 10% of your investment. Tax-free.

If you learn to calculate ROIs and reorganize your household expenses on the basis of ROIs, whatever income you have will go dramatically further than it would for someone who hasn't done that.

[ta1243]

> Romania in the 01930s

You've lost me.

[kragen]

Great! Recognizing you're lost is the first step to getting found.

[anon191928]

they print more than %10 each year, LMAO. people are not smart. remember

[testdelacc1]

I really like this comment. Concisely explains the points of view on an investment like this. There’s not much more to add.

This is why I open the comments before the link.