solar panels (Photo credit: spanginator)

What would happen if nearly every home in America were equipped with solar panels to the point that they were nearly energy independent?  That is the question that power companies around the country are asking themselves today, and having to find answers for in order to prepare for in the future.

Perhaps you have heard about Silicon Energy, an American company located in Mt. Iron, MN, that manufactures Photo Voltaic (solar) panels.  It has been reported that they are yet another solar manufacturer that is in danger of going out of business.  However, the reason for their struggle is not what you might think.  They are not being undercut by the Chinese. Their CEO and Board of Directors are not running off with the corporate profits.  And, their product is not a bad product.

The problem…energy consumption is down.

There are many variables that cause the rise and fall of energy consumption and two of the biggest are weather (extreme heat and cold), and industry.  While it is true that this has been an extremely hot summer, causing more people to use their air-conditioning systems a little more, and causing “peak load” problems for power generators. But, when averaged out over the course of six to twelve months the actual amount of energy use across the country is down.  This is due partly because the economy is down and thus manufacturing output is down, as well as, a high number of businesses have closed.  The other reason that energy consumption is down is due to efficiency.

All across the country, people have been replacing old electric appliances, air conditioners, and other electrical equipment with units that are way more efficient then their predecessors.  Although these new energy efficient models are not a recent phenomenon, they started developing them five or more years ago and they are improving efficiency with each new model, it has simply taken this long for a significant amount of these energy efficient models to be put into the hands of enough consumers to begin noticing a difference.  So now we have a situation where we no longer need as much energy as we needed just ten years ago.  And as both buildings and products continue to become more energy efficient, we will need even less electricity.

That is a big problem for the companies that provide electricity.  It is a problem because most of the electric generating infrastructure has been around for upwards of fifty years or so and run on either coal or natural gas.  Electric generating companies have a lot of money invested in both power plants and the power lines that deliver electricity to your home or business.  And it costs a lot of money to maintain this generating and delivery infrastructure.  In addition, nearly all of the electric generating companies are either privately owned or part of a co-op with responsibility to their shareholders to distribute profits.

To respond to the flat energy consumption, electric generating companies all over the nation are requesting rate hikes in order to maintain the same profit levels they enjoyed ten years ago.  It was recently reported that three electric companies in Minnesota (where Silicon Energy is located), have requested rate increases:

• Xcel Energy requested and was approval for a $72.8 million hike – but had asked for even more;
• Alliance Energy, which also serves Minnesota customers, will get another $10.2 million.
• Roseau Electric Cooperative in extreme northern Minnesota will hike electricity prices by about 9%.

So how do solar panels effect electric generating companies? During the first five months of 2012, Xcel Energy had a solar panel program in place for the residents of their service area.  The program was so successful, so popular, and demand was so great, it quickly burned through this year’s total $5 million allotment in just those five months. Solar panels were going up left and right in Minnesota.  The beneficiaries of this project were the customers of Minnesota and Silicon Energy, who not only manufactured the Solar Panels but sold them to the residents in the program.  Individual consumers benefit by weaning themselves from the grid, getting free energy (after their equipment is paid for), more independence and less dependence on corporations, or government aid for power when times are tough – and not to mention reducing world instability caused by global competition or energy resources and a cleaner environment overall.

However, Xcel Energy like many energy companies are leery of too many solar panels because the proliferation solar panels means the demand for coal and gas energy will continue to “be flat” or even diminish.  And as I stated, energy generation and distribution (via coal and gas power plants and power lines), are how today’s energy companies make money.

Obviously, we are not going to cover the rooftops of every home in America or even come close in the next fifty years.  But as more and more homes and businesses become more energy efficient, the demand for mass power generation will become less and less.  Meaning, less customers to pay for the ageing infrastructure needed to continue to provide electricity to the remaining customer base.

Will there always be a need for mass power generation facilities?  I believe that there will.  We will need a reliable power source for infrastructure that is key to our life support (e.g. potable water treatment and delivery, sanitary sewer treatment, emergency services).

All of that said, there is one technology that stands to increase the need for electricity…electric automobiles.  Although the electric vehicle (EV), industry is in its infancy and struggling, it will not be long before they become more reliable as a source of transportation, and with their proliferation start placing an increased demand upon our electric infrastructure.

Just this last week Kohl’s Department Stores announced that they will expand its EV charging station initiative with 30 new stations across 15 additional Kohl’s locations by the end of fall 2012. This expansion spans two states new to the Kohl’s program — Illinois and Wisconsin —adds additional locations to the company’s Texas EV program, and will make a total of 101 charging stations at 52 Kohl’s locations across 14 states.

It is interesting to note that one of Kohl’s partners in this project is Duke Energy, a major generator of coal and natural gas electricity.

Kohl’s charging stations will add to the more than 4,350 public EV charging stations currently in the US, according to the US Department of Energy’s Alternative Fuels Data Center.  In addition, an August 2011 report from Pike Research forecasts that more than 1.5 million EV charging locations will be available in the US and 7.7 million locations worldwide by 2017.

Of course, electric vehicle charging stations too, can be operated on solar power.  It is time for electric generating power companies to begin changing their business models.  Oh, and by the way, you can still get incentives from various Government Agencies to install your own solar panels.

Related articles

• Solar panels are a sound investment for your home and the future (solarworld-usa.com)