Sky-high costs despite cheap solar power; is regulatory capture to blame?
Why your power bill doubles despite cheap solar tech.
What is the future of energy, especially here in the United States? While three states, New York, Massachusetts, and California, offer the most progressive values for their residents, the energy costs in these states are some of the highest in the nation. These states are rising 3-4% per month while the cost of energy is at historical lows and continues to decline - especially when it comes to solar power. This is due to an antiquated infrastructure and regulatory capture to secure a monopoly for the energy companies.
While state-sponsored monopolies exist for energy companies (even while these political leaders scold other monopolies), they create a problem for energy users in those and all states where there is a governmental mandate on the cost of energy and innovation.
For instance, 130 million units in the United States are served by around 3,000 electric utilities. This creates a captive market bound by government rules and regulations in exchange for homeowners being forced to purchase electricity from those utilities. These requirements sound beneficial as utilities are forced to upgrade their infrastructure periodically. As part of the requirements, utilities will spend over a trillion dollars on upgrading powerlines over the next decade, as they currently allocate around $250 billion annually for this effort. Now, while energy costs continue to decrease, homeowners and renters pay double every 5-7 years due to the utilities' capital expenditures to upgrade their brittle and outdated infrastructure. Perhaps it would be better for Americans and our energy independence if that CapEx was redirected to decentralizing the current antiquated system to a contemporary and safer solution with each home being their own self-sustaining power plant.
An energy revolution is underway, empowering proactive homeowners to generate and manage their own energy without the need for the antiquated infrastructure offered by legacy energy companies. This revolution is driven by the decreasing cost of solar panels and battery walls and the increasing efficiency of these technologies. We are at a point when communities and individual homeowners can become their own miniature power plants, decentralizing energy in a more efficient manner. Yet, governments often hinder this innovation by protecting the state-sponsored monopolies they have created.
Think about it; technological advancements in solar energy have made it more viable than ever in all weather conditions, even on cloudy days. Having backup electricity in the battery walls makes this all more feasible than in the past. Today’s solar panels harness UV bands beyond our visible spectrum, ensuring their ability to collect energy even on days of clouds.
A simple system can meet a household's daily energy needs and return excess power to the grid, potentially earning the homeowner a small income. This shift could fundamentally alter the energy landscape, transforming 130 million homes into competitors to the entrenched utility companies.
While I do not support subsidies, they have made it much more feasible for homeowners to adopt solar energy than in the past. Another idea being mulled about is having a large company, let’s say Amazon, as part of being a Prime member; Amazon will come in and install and manage the solar on your home at no additional cost. This kind of initiative, if implemented, could be a game-changer, beneficial to the homeowner, and accretive to Amazon.
In addition, such a decentralized system would further reduce our dependence on foreign energy sources and end our notion of involving ourselves in global conflicts for “resources.” Now, I am not oblivious to the minerals that go into batteries and solar panels, though we could bring the refining here on American soil (similar to what Tesla is doing in Texas with lithium).
To understand the broader implications, consider Clayton Christensen's concept of "Crossing the Chasm." Early adopters, often zealots of new technology, pave the way for mass market adoption. This pattern is evident in the proliferation of smartphones, electric vehicles, and now solar energy. Initially costly and niche, these technologies evolve to become essential, with reduced costs and enhanced features driving widespread acceptance and convenience.
The transition to renewable energy, particularly solar, mirrors this journey. With the introduction of significant subsidies and technological advancements, solar energy has crossed the chasm, moving from a niche market to a mainstream solution. This shift is not just an environmental or economic imperative but a fundamental transformation of the energy paradigm. I believe that over time, as battery and solar technologies continue to advance, we can end subsidies altogether, and it will become more economically feasible on its own.
