Utility Companies’ Income Shrinks As Solar Industry Booms
Solar panel installations are on the rise In the U.S. The increase in installations is fueled by the fact that photovoltaic panels are cheaper than ever before. Another contributory factor is that those who still cant afford the upfront costs for the systems can still get access through a monthly leasing plan, or a power purchase fee.
While the boom of solar power may be good for the environment and benefit consumers, it is not such a great thing for utility companies. This is as the income of utility companies continues to shrink as this renewable energy source continues to grow in popularity. The reduced income is as a result of a net metering policy designed by policy makers to encourage the installation of solar systems.
Under the net metering policy, households that generate enough electricity to feed the grid pay a lesser amount for their utility bill. As a result of the reduced income stream, utility companies are now seeking to increase the amount they charge households with solar systems. Net metering is a concept that is changing the utility industry along with smart meters that are enabling once unheard of consumer pricing models like prepaid electricity and time of day pricing.