The relationship between the utility and the solar industry is both bilateral and complex. As solar power continues to grow, the utility is simultaneously saving money and taking a loss as a result of simply having less product to sell.
An expanding solar presence throughout the nation is causing the traditional utility companies to reverse their trajectory in buying electricity that they sell to consumers. For a long time the amount of electricity they were required to purchase in order to keep up with demand was rising. But now the utility is having to scale back as more people generate their own power via the sun.
What studies say: solar saves customers money
Carnegie Mellon University and the National Renewable Energy Laboratory paired up to research the impacts of solar power on utility companies in the U.S.
They conducted their study on the California energy market; that’s the state with the country’s largest solar industry. The research team found that from 2013 to 2015 utility companies saved around $650-$730 million dollars in electricity. That’s electricity that they would have purchased from a wholesale provider.
This seems like it would be a positive finding for the utility companies, however, it is misleading. That chunk of change that they saved represents a massive bundle of electricity, which the energy provider is no longer able to sell and profit from. This lack of demand in traditional sources of electricity will ultimately cause the wholesale energy provider’s prices to fall. That delivers an additional blow to the utility in the short-run.
And though they are not the one doling out punches, the consumer reaps almost every benefit of solar power – at no cost.
Eliminating the need for costly new power stations
While Carnegie Mellon and the NREL studied only the effect that distributed photovoltaic cells are having on procurement costs for utilities, there is a wide array of benefits that solar power brings to markets.
Ars Technica, a news site fixated largely on technology, science, and politics, highlighted in a recently published article on this subject that solar is increasingly versatile and profitable for the economy. Author Megan Geuss notes that it can “defer certain types of infrastructure upgrades, reduce the impact of blackouts, improve air quality, and reduce greenhouse gas emissions.”
The article points out that the solar market actually takes on costs of the utility in places where net-metering policies are in place. Households can contribute surplus solar power back to the utility and receive compensation in the form of bill credit. Utilities can supply that energy to other consumers at retail price.
Expanding solar and benefiting VA, MD and DC
Ipsun Power offers our customers the opportunity to capitalize on these short and long-term benefits. Not only can they put themselves in a better position financially, but also make our country a more sustainable and ingenious place to live. Contact us today to be a part of this change.
