The ever decreasing costs of “going green” are incredibly encouraging to the millions of home and business owners who want to radically shrink the size of their carbon footprint and reduce or eliminate their energy bills. Today, we have so many opportunities to be smarter users of energy, while saving money at the same time. We can drive hybrid and electric cars, and buy everything from Energy Star appliances to super energy efficient LED bulbs. In recent years, the move to power our homes and businesses with solar panel systems, has been explosive. The cost of solar has dropped dramatically, therefore providing many new solar power system owners with large, immediate energy savings. This is great for those that can afford solar, but what about everyone else that relies on the coal and gas fired power plants of the traditional utility grid? The utility companies running these power plants need a certain amount of paying customers to continue to operate and maintain the aging power grid. If a large segment of the population produces their own power with solar panels, the utility companies won’t have enough revenue to continue their operations. The remaining utility consumers, may be stuck with skyrocketing rates as the utility companies struggle to survive, as well as an unreliable and ever degrading power grid. So, will our love for solar crash the power grid?
Most home and business owners love the idea of solar power
The public utility grid or electric industry is powered in many ways – hydroelectric generators, coal burning plants, nuclear energy, natural gas fired systems and more. They, too, are exploring renewable resources, but not for the same reasons as home and business owners. The utility companies want to continue to sell us power that they produce and control. Energy providers have kept the electricity flowing, while enjoying over a century-long monopoly. Current alternative and renewable options are positioned to push them aside.
This shift to solar energy is creating a remarkable controversy. In essence, the controversy involves a few factors:
- Utility companies, counting on large-scale clients, are witnessing tremendous losses (or at risk for them) when larger clients switch over to produce their own electricity from solar energy systems
- Utility companies are insisting that any losses will force regular consumers to experience huge increases in the cost of their electricity rates
- To offset losses, utility companies may ask some customers to pay “buy out” fees that allow them to maintain the grid and avoid going out of business
One place where this can be seen is in the city of Las Vegas, Nevada. A thriving tourist spot, it has around 40 million visitors each year. The three major casino companies in the city are accountable for around seven percent of the revenue for the state’s main energy provider, NV Energy – a Berkshire Hathaway holding by billionaire investor, Warren Buffett. These casinos have recently taken strong steps towards energy independence.
MGM Resorts, one of the three companies, partnered with NRG Solar to install a massive solar array on its conference center (capable of supplying 1,000 homes with energy for a year) as well as replacing more than one million standard bulbs with low energy LED bulbs. They have also made efforts to purchase their electricity outside of the NV Energy system, prompting the state’s Public Utility Commission(PUC) to take drastic steps.
MGM partnered with NRG Solar for this massive solar panel installation
The idea that several enormous clients would pull their funding from the utility company led the PUC to approve lowering the rate that solar energy users are compensated for the supplies they add to the grid through net metering, and laying down rulings for exit fees to be paid by the casinos and others. For instance, NV Energy is asking for a $126.5 million payment from the three casino firms if they do exit the market as planned.
They did the same to data storage firm Switch in 2015, demanding $27 million in order for the firm to leave. Instead, the data company paid for the construction of a solar array in the Las Vegas area that would enable NV Energy to supply the needed renewable energy to them.
Even the city of Las Vegas itself is taking steps towards sustainable energy, with plans to be 100% sustainable by 2017 (meaning street lights, parks, firehouses, and city buildings). To win approval, the city had to agree to purchase the majority of its energy from the NV Energy solar plant, elsewhere in the state.
Will Solar Crash the Power Grid?
The situation playing out in Nevada is a small example of the larger dilemma, that’s developing all across the country and, eventually, the world. What’s going to happen to those people that can’t afford to install a solar panel system on their home or business? They may be stuck in a no win situation in which they are paying ever increasing prices for electricity as the utility companies try to offset the lost revenue from a shrinking customer base. At the same time, the quality and reliability of the electric service may be degrading at a constant rate because the utility companies cannot afford to maintain the grid. There’s nothing worse than paying more, for a bad product.
But, that’s only the beginning of the potential problem. Will solar energy eventually cause the power grids to completely fail due to low usage, poor maintenance, and financially struggling utility providers? By producing our own energy with solar power systems, are we jeopardizing the survival of the utility companies and their ability to provide power to people that do not have solar, do not have the ability to get solar or can’t afford solar? We don’t have any way of knowing the answers to these questions yet, but we’ll need to figure it out very soon. In ten years we’ll need a solution, because if we’re still asking if solar will crash the power grid, then if just might be too late.
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