A Residential & Commercial Solar Installation Company Solar Repair & Maintenance

By: Steve Ladelfa, Solar Consultant, Yellowlite, Inc.

According to the U.S. Energy Information Administration (EIA), the cost of electricity for all sectors has increased over the past few years and is expected to continue to do so. The residential sector has an average retail cost of 12.13 cents per kWh and is expected to increase to over 12.30 cents per kWh in 2014 whereas just a few years ago the cost was 11.72 cents per kWh1. Why is this cost of electricity from utility companies rising? There are a few reasons why. 

The first factor is the increasing cost for the fuel source that conventional utility companies rely on to produce electricity. The fuel source that most utility companies use to produce electricity is coal and other non-renewable fossil fuels. While much of these fuels are mined and found within our borders, a large portion also comes from across the world. Due to the globe's increasing demand for electricity, companies have struggled to mine and harvest the fossil fuels required. As we are mining fossil fuels at a rapid rate, many times more than the rate they are naturally produced, these sources will eventually be devastated. Much of the “easy” fossil fuels, or the fuels that are close to the surface and therefore require  a relatively low intensity of energy to obtain, have all been used and companies are forced to mine further and further to obtain coal. So as we mine more coal, it gets more and more expensive to get. This added difficulty to get the fuel is a main contributing factor to electricity prices as fossil fuels are where the majority of our society’s electricity generation comes from.  

The second factor in the rising cost of electricity is due to increasing government regulation on pollution. As environmental concerns grow and pollution rates increase, governments are starting to recognize the harmful effects of carbon-dioxide in our atmosphere. The conversion of coal and fossil fuels to electricity almost always requires the production and emission of carbon-dioxide into our atmosphere. As governments restrict the amount and types of pollutants that utility companies are allowed to emit, there will be more “smokestack scrubbers” and cleaning technologies to help the companies follow the regulations and lower the harmful emissions that are sending into the atmosphere. These added costs to producing that electricity. Since the cost of operating a coal or natural gas power plant has increased dramatically, so has the cost to the customer. 

The last factor in the upward trend of electricity prices is the ever-rising cost of maintaining the infrastructure for utility grids. As more and more grid is placed and development expands into previously unclaimed territory, there is added strain to the existing grid. And with this added strain comes a larger focus on maintaining and renovating the current grid lines. Think of a train companies cost. As they install more train track in new cities and areas, they have more track to monitor and maintain in good condition, and will force them to spend more and more. This is what utility companies are finding. And as a result, the cost that they can deliver electricity to you has gone up tremendously.

How can solar help? With solar you are able to get electricity at a much lower cost per kWh. This is because solar will produce energy for decades to come, needs little or no maintenance, and has no transmission costs as the panels are on your roof and property and there are negligible travel losses compared to utility companies sending energy miles upon miles. So investing in a solar panel system for your home or business will not only allow you to lower your electric bills and and prevent pollution, it will also allow you to be less reliant on electric rate increases. 

Want to learn more? Watch our Why Cost Of Electricity Is Increasing video now!

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