Solar power is on the rise in California, with many households beginning to install rooftop solar energy panels. There’s no denying that the rise of renewables is a positive shift for American energy, but it does bring with it some new challenges that can and should be addressed.
In 2013, a new rooftop solar system was being installed every four minutes in the United States, according to National Geographic. Even today, the popularity of solar energy continues to grow, especially in the state of California. According to Utility Dive, San Diego Gas & Electric (SDG&E) currently serves 45,000 rooftop solar customers, with the total number of solar installations increasing monthly at a rate of 4-5%.
As the popularity of solar panels continues to grow, however, both providers as well as customers are running into significant financial challenges, which begs the question: Are solar panels worth it?
Solar Energy and Utilities: A Complicated Relationship
According to a study done by the California Public Utilities Commission (CPUC), the average residential SDG&E customer utilizing rooftop solar energy pays only 54% of the cost to serve their energy needs. Then why is there such a disparity between solar and non-solar customers?
It all boils down to net metering policies, which, as National Geographic explains, “allow solar households essentially to run their electric meters backwards if they generate enough energy to feed into the grid.”
What this means is that solar households potentially avoid paying for utilities far more often than non-solar houses on a shared electric grid — those who use solar power are rewarded for using a renewable source, as they should be. Utilities providers have to be prepared to provide power to solar customers after the sun goes down, and, on the other hand, solar customers can pump energy back into the system and roll back their meters when they experience a surplus on sunny days. The relationship is certainly complicated, but, like any complicated relationship, it’s also one worth working on.
David Owens, Executive Vice President of Business Operations at the Edison Electric Institute (EEI), explained how the money used to pay for utilities helps to maintain wires and other equipment necessary for 24/7 electricity, placing a heavy burden on neighbors without solar rooftops: A CPUC study reported that by 2020, the state’s non-solar customers could end up paying for a $370 million worth of solar-generated energy per year. Ideally, providers and legislators can come up with a way to minimize these discrepancies and equalize costs for solar and non-solar customers alike.
According to Greentech Media, state lawmakers recognized the gravity of this situation by passing AB 327 in 2013, a bill directing CPUC to come up with a new program by 2017 that ensures both solar and non-solar customers pay fairly for their share of the power grid. There’s no doubt that legislative progress is being made to equalize energy costs, and hopefully in due time we can minimize the relatively high cost of renewable energy.
Solar Power: Regulatory Challenges
Despite its obvious benefits, solar power does pose certain regulatory challenges, mostly because of its high cost and relatively inconsistent availability. As I mentioned in an earlier post, solar and wind are beholden to a number of unpredictable factors–such as the number of windy or sunny days within a given month–and cannot guarantee a supply that meets standard demand.
Unfortunately, we haven’t yet developed the technology behind renewable energies — like solar power — to serve as base load plants, and most renewables remain intermittent power sources whose productivity is determined by the environment, not the human demand for it. This is one factor (of many) that contributes to the higher costs associated with renewable energy. And sure enough, according to a report from Solar Power Is the Future, producing electricity from the sun is five to eleven times more expensive than producing it from coal, hydro, or nuclear sources.
The high cost of solar power isn’t new news. Since solar panels use expensive semiconductor material to generate electricity directly from sunlight, the technology can inflict a heavy toll on customer’s wallets. There’s also, of course, the issue that they can’t generate energy at night or on a cloudy day.
These problems aside, it’s still fantastic that individual energy-users and even whole cities and countries are turning to solar power as a more sustainable, environmentally resource for energy. There’s no denying that it poses it’s fair share of costs and problems, but the sooner we begin to address these issues, the sooner we can begin to develop ways to minimize the negative effects of producing solar energy.
Ernest Moniz, U.S. Secretary of Energy, says the advent of solar energy represents an important milestone for renewable energy, as companies are challenged to rethink their businesses. For any business looking to become as sustainable and as successful as possible, Midwest Industrial Supply, Inc. can provide the professional assistance and expertise they need to produce safe and affordable energy.