Energy Irony: Conservation Could Threaten Electric Grid

Tuesday, February 24th, 2015

We all want to be energy-smart and save money by using efficient heating and air conditioning systems and keeping our homes and businesses insulated and sealed from air leaks.

This energy-efficient philosophy seems to be working in the U.S.: consumption of electricity hit a peak around 2007 and has since declined modestly. Check out the charts here and here.

That’s good news for consumers, because we’re keeping more money in our pockets, but interestingly, it’s not good news for the condition of our country’s electrical grid, according to some utility companies.

As revealed in this recent Wall Street  Journal article, some industry representatives worry that with electric sales on the decline, there won’t be enough revenue to maintain the national electric grid.

Some utilities are pressing their state regulators to permit an increase in rates or establish fixed monthly fees to help with grid maintenance costs. But industry analysts say that could lead to a “death spiral,” where customers respond to higher rates by reducing energy use even more or by taking themselves completely off the grid by switching to solar or other sources of electricity.

“Utilities seem to have concrete shoes on,” said Elisabeth Graffy, co-director of Arizona State University’s Energy Policy, Law and Governance Center, in an interview with the Journal.

Experts attribute the decline in energy use to more efficient equipment and energy-saving devices such as smart thermostats typically installed in homes and businesses these days. Increased adoption of solar power and other sources of renewable energy also seem to be a factor.

Some utilities see the writing on the wall and have been working to diversify their energy-producing portfolio. The Journal took note of NRG Energy Inc.’s efforts to acquire companies with solar-energy products or services. It recently bought Goal Zero, which markets solar generators for charging or powering devices from phones to refrigerators.

In addition to NRG, other utilities are strategizing for a future where Americans may no longer be completely reliant on the grid, the Journal reports.

At Daffan Cooling & Heating, we’re already experiencing the future–many customers are investing in solar-ready air conditioner and heat pump systems. Are you ready to say goodbye to the grid? Check out this link to learn more!