The first chapter, the first big lesson for us, is to understand what economists call the learning curve of a new technology. Theodore P. Wright was an architectural engineer with an inquisitive mind. Everyone knew that costs decrease as production increases but he wanted to know if there was a pattern that could predict it. The principle is rooted in economy of scale.
Wright eventually found that as production doubles, the cost of labor decreases by 20 percent. Production becomes more efficient as workers find better ways to do things and technology is improved. This formula is Wright’s Law.
In a graph of the production and cost of making the Model T Ford, Wright observed something else: as demand by the public grew, cost of production decreased and thus the price to the consumer. One drives the other.
When you plot the production by cost, you are measuring another principle that the business world knows well for any new product: the learning curve. The company and workers learn more efficient ways of making something further driving down the price.
An important idea is that the reverse is also true: if a new technology is left to linger, i.e. production is slow due to lack of demand, then the cost of production will not decrease and the potential will die.
It is not time that drives the learning curve, it is the amount of production.
Citizens can drive the learning curve for renewable energy to reduce humanity’s footprint on the Earth. We are not passive bystanders waiting for businesses and government to figure out how to make cheap EVs: we have to drive it with demand for it. And, the IRA funding will be available to you and your family or business to do just that! Go here to learn about the tax and price incentives available to all of us on January 1, 2023 and for the subsequent decade!