Fragile Peace Between Utilities and Renewable Energy

Utility companies to date have attempted to meet solar energy users halfway, offering incentives such as net metering to keep their customers tied to the grid. However, as residential solar applications have become more popular utilities are beginning to feel the decrease in their bottom line. Nevada provides a good case study to how solar energy companies respond to demands from utilities to increase their bottom line. After Nevada utilities started charging solar energy users a monthly fee for having a solar energy system, almost all of the solar installers, manufacturer and those in the industry left the state. The study proves that a balance between the two energies may not have a quick resolution to the growing problem.

Even recently, companies such as Xcel Energy have attempted to remedy this loss by proposing a monthly fee of eight dollars to net metering customers. However, the proposal was swiftly met with opposition from consumers and environmental groups that argued that imposing a fee on renewable energy users would discourage further installations.Once the fee was implemented the energy giant could increase the fee at their leisure. To Xcel Energy’s credit, they met with the groups and determined that they would not add the fee to end user’s bills. This decision was not only due to the outrage from their opposition, but by the very real possibility that homeowners would simply switch to an off-grid system if their financial incentives were threatened.

Off grid technology is a new threat to utility companies as battery backup technology has taken huge strides in the last two years. Companies such as Tesla, and Enphase Energy have rolled out cutting edge technology that takes out the cost and maintenance that often drives away customers. There is no word from how utility companies expect to meet the new challenge to their future energy consumption. Furthermore, with the continuing decline in the cost of solar the resolution of meeting their budgetary needs and the demand for renewable energy is difficult to predict.

Utilities have further leverage over residential users who wish to remain connected to the grid, many siting old grid technology as a reason to set a cap for how much energy can be fed back into the grid. This cap can keep consumers paying into utilities more than they would have if all their produced energy had been fed back into the grid. While upgrading the grids across the United States would be a difficult undertaking, no notable strides have been taken in the last twenty years to making it more efficient. While the grid is clearly in need of an upgrade, even outside the scope of the increase in solar energy arrays, with no clear plan in site, the argument makes a thin one at best. However, to be fair, many utility companies have taken strides to source some of their energy from commercial sized solar energy farms, with many attempting to meet between 10%-30% of their total energy from renewable energy sources by 2020.

Consumers may be more included to continue using grid technology if utilizes source more of their energy from solar energy sources and offer a decrease in energy bills. As they continue to install renewable applications from solar to wind however, many states report higher energy bills than previous years. This could be due to the loss in profits as solar arrays continue to increase, or to cover the initial cost of their own solar arrays, regardless of the cause, any increase to utility bills is sure to have a negative effect in the long run to utility companies. Hopefully in the near future, utilities will be able to find a way to remain useful and necessary while being renewable energy friendly.