Friday, April 22, 2011

Grid Electricity Rate Increase and the Role of Solar

Grid electricity had been on a steady rise for almost 4 decades. In some areas, residential electric rates have increased, on the average of 6% per year. It seems that people are getting used to increase as something to be expected.

However, many are now getting aware that the expenses are gradually becoming a bigger slice of the family budget. This concern is fueled by the fact that there are some alternative solutions to the problem. Many are getting serious with solar more keenly now than they did years back.

The present state of grid electricity

Grid electricity had been on the rise and is expected to continue to climb in a speedy rate over the next 5 to 10 years. What are the causes of this continuous rise? Are they preventable? And what measures are being done? Here’s what the experts say.

1. Almost half of the electricity in the United States is produced from coal. The use by electric utilities accounts for about 92 percent of total U.S. coal consumption. So any increase in the cost of coal will surely increase grid electricity.

2. Over the commodity cost of coal itself, two other important factors will influence the cost of coal generation. These are not within the control of coal producers.
a. First, transportation costs are critical to the coal industry. Coal transportation can be very expensive – in some instances it accounts for up to 70% of the delivered cost of coal. The cost of shipping coal can cost more than the cost of mining it.
b. Second is the recently high sulfur dioxide (SO2) emissions allowance costs in the SO2 permit trading market.

3. The price of coal had been upward since a decade ago. It increased from around $30.00 per short ton in 2000 to around $150.00 per short ton as of September 2008. As of October 2008, the price per short ton had declined to $111.50. Prices further declined to $71.25 as of October 2010.

4. With over 100 new coal power plants proposed nationwide, the Union of Concerned Scientists has expanded its efforts to heighten awareness of the true costs of coal. Coal power plants release the most global warming emissions of any source of electricity. A growing consensus, which even includes business and utility executives, expects that Congress will regulate global warming emissions in the next few years.

5. The Clean Air Act and the Clean Water Act require industries to reduce pollutants released into the air and the water. Power plants use flue gas desulfurization equipment, also known as "scrubbers," to clean sulfur from the smoke before it leaves their smokestacks. In addition, industry and government have cooperated to develop technologies that can remove impurities from coal or that make coal more energy-efficient so less needs to be burned.

What solar can do

The use of renewable energy is not new. Many years ago, wood is the most commonly used renewable to supply most of the energy needs. As the use of oil, coal, petroleum, and natural gas grew in popularity, people became less reliant on wood.

Today with the growing problems of these popular sources, people are taking a second look at renewable. Solar is the most promising with recent technological advances in cost and efficiency. Consider these observations and facts:

1. With solar energy in your home, you are your own generating company. You are not affected by threat of electricity increase or power interruption because you have free fuel from the sun. Fuel cost had been the cause of steady rise of grid electricity as earlier mentioned.

2. Many homeowners believe that solar in the home is a significant step towards overcoming grid electricity cost. Solar demand has grown at about 30% per year over the past 15 years attesting to its growing acceptability. One recent National Poll Survey showed that 77% of Americans feel that the federal government should make solar power development a national priority including the financial support needed.

3. Solar energy installation costs have declined on average 4% over the past 15 years. Now the cost of solar electricity installation ranges from $ 5 to $10/watt without incentives.

4. The speedy rate of increase of fossil electricity makes reducing energy consumption via solar and other energy-saving measures more financially rewarding than ever – with return on Investment coming even faster.

5. The increase in electricity rates that kicked in on January 1, 2010 will make investments in renewable energy solutions more appealing and cost-effective than ever, according to Greenspring Energy.

Now that the cost of grid electricity is on the upswing, home solar power becomes an attractive hedge. Not only will it protect the family from the inevitable fossil power cost increase but likewise, will provide a solution to the growing pollution of the environment. Certainly using solar becomes a win- win proposition for all.

We invite you to visit our Informative Solar Article page for more practical tips, simplified application guide and established solar benefits.

Author’s Box
Jacinto Demonteverde, Jr., the owner, is a strong advocate of solar power adoption. He writes practical articles to keep established and prospective solar users well informed. Visit him at: You are welcome to republish or reprint this article free of charge provided the content remains unchanged including the Author’s Box. No permission is needed.


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