America’s Energy Future Looks Greener, But More Expensive
As long as the lights turn on, most people do not give much thought to the electricity in their homes. To some extent, this demonstrates how stable the utility industry has been for decades. After the major pushes to electrify the country a century ago, the industry itself has changed slowly, primarily by integrating new methods of generation. America’s energy future is expected to require radical changes to this system. As they plan for the future, utility companies are looking to secure their grids and to make them better accessible to the next generation of alternative energy, which is an ever increasing portion of the fuel mix. Even so, solar’s future is tied to low interest rates and access to financing, something that may be shifting in the coming months.
“The higher the interest rate they’re discounting, the higher price at which electricity has to be sold on a per-kWh basis for projects to make money,” he explains.
In this situation, it seems increasingly likely that consumers will face increasing rates in the near future. Historically, utilities were able to fund investments in new technologies through expanding their customer base. As consumers become increasingly energy efficient and aging technology needs to be replaced, this model seems unlikely to be sufficient.
Published in Inside Sources, 27th March, 2018