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Why Big Utility Companies Don’t Want You To Go Solar?

October 12, 2022


Many utility companies have invested substantial amounts of their marketing resources to encourage the use of renewable energy, especially solar, as a result of solar's rising consumer popularity. You might thus be surprised to learn that many of the same utility corporations oppose going solar, but why? Solar is a ...

Many utility companies have invested substantial amounts of their marketing resources to encourage the use of renewable energy, especially solar, as a result of solar’s rising consumer popularity. You might thus be surprised to learn that many of the same utility corporations oppose going solar, but why?

Solar is a threat to revenue

Solar energy systems, whether they are residential solar or commercial solar, boost the grid’s power output without needing the utility company to build new power plants. Consumers then pay for these plants through rate increases and service costs. While this is advantageous for both consumers and energy corporations, it also poses a danger to their revenue stream.

Customer-friendly regulations

Government policies have shifted to be far more benevolent to consumers as solar energy has become more and more popular. The solar investment tax credit (ITC), which was introduced by the federal government in 2005 and has since been frequently extended, is currently set to last for residential projects until 2024 at a rate of 26 percent in 2022, 22 percent in 2023, and zero in 2024. In addition to the ITC, the majority of states have put in place consumer-friendly regulations like net metering, which enables owners of solar photovoltaic systems to sell any extra energy back to the grid, frequently at a profit.

Also Read: Reasons You Should Switch to Solar

Environmental regulations

Utility companies have been subject to rules that require them to fulfill specific renewable energy criteria, in addition to policy changes that benefit people and businesses. Many utility companies have reluctantly provided incentives to property owners to build qualifying systems and connect to the grid in order to comply with these regulations, assisting the utility in meeting its renewable energy standards.

Also Read: Best Locations to Install Your Solar Panels

Competing projects

Your power won’t come on just by installing solar panels on your home. Your system needs to be connected to the electrical load on your home in order to function. The majority of solar arrays don’t have enough room or energy storage to operate entirely independently.

As a result, the majority of systems will require a connection to the electrical network. Unfortunately, the capacity of the grid in some areas restricts the number of possible linkages, and utility corporations are now heavily investing in their own renewable energy initiatives, which are in competition with consumer programs for that interconnection spaces.

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