Solar Energy: A Path to the Future

Solar Energy: A Path to the Future

Solar energy prices have seen a sustained decrease – it once cost 20 times as much as coal to generate the same amount of energy with solar panels. However, the price dropped by more than 90 percent and is now comparable to fossil fuels.

Solar distributed energy resources (DERs) have had increased interest and implementation, valued at $52.5 billion in 2018 and estimated to reach $223.3 within the next six years. Accordingly, the U.S. Department of Energy recently announced a $100-million, five-year initiative to research solar fuels.   

Millennials Are Going Green

Interest is, in part, because of Millennials’ desire to turn over a greener leaf. They are willing to invest up to $15 per month for renewable and solar energy and prefer environmentally friendly services – and they’re inclined to research their provider and switch if they feel a better deal is in the offering.   

Although the cost per watt has come down from $76.67 in 1977 to 60 cents, the upfront costs still are keeping solar energy out of reach for low-income Americans. An estimated 80 percent of those who want solar energy can’t install panels on their homes.   

Arrays Present an Opportunity

Solar gardens, a community or utility-led solar array, are affordable alternatives to installing panels at private homes. Solar gardens pool the costs and the benefits, making it an attractive option for those who can afford to buy-in or “subscribe.”

It also makes it the perfect solar energy entry point for utilities. More than sixty percent of utility professionals predict continued renewables growth, and some are capitalizing on the demand.

Solar energy consumers can purchase a share in an array by subscription or lease-to-own, and, in most cases, the utility will calculate energy generated from the consumer’s “share” of the array and credit it to their account. The overall annual cost for the subscription or lease can be greater than purchasing energy without the clean option. However, as previously noted, a growing number of consumers are willing to pay more for renewable energy.

Consumers show a preference for flexibility, with month-to-month contracts and no upfront or cancelation fees, and on-bill benefits and billing. This reflects the growing power of the Millennial market and their subscription culture.

Utilities Are Entering the Solar Market

Co-ops, like the People’s Energy Cooperative, lead the way in establishing utility-led solar energy, responding to demand from members. Investor-Owned Utilities (IOUs), like Florida Power and Light Company, have entered the market in leadership positions. 

Community solar energy grows as interest increases and the prices drop. There is nearly 2 GW of community solar installed across the U.S., an increase of more than .5 GW since June. With utilities owning just over 30 percent of capacity, there is plenty of room for growth where consumers demonstrate demand.

Encouraging engagement through value-added services such as solar energy is an important and necessary part of retaining the Millennial customer. HomeServe can improve customer engagement and satisfaction by offering a suite of optional home systems repair products and educational materials. To learn more, contact us.

Gas Line Repair Puts Homeowner at Risk of Economic Shock

Shannon, a Southern California Gas customer, was at risk of economic shock when learned she had a problem with her gas service line. Service was temporarily discontinued to her home after a leak was detected. 

“The gas company could detect that there was extra gas being used,” Shannon said.

An Unexpected Repair is an Unexpected Expense

Without gas service, Shannon was unable to enjoy many of her home’s basic necessities in the interest of health and safety. Returning service would cost thousands of dollars, putting her at risk of economic shock.

Economic Shock

Shannon’s situation isn’t unusual – more than 50 percent of American homeowners needed a home systems repair over a 12-month period, according to the Winter 2019 edition of HomeServe’s Biannual State of the Home survey. These situations can cause economic shock, a large and unexpected expense that negatively impacts a household.

Economic shock is even more common than emergency home repairs, with 60 percent of U.S. households having experienced economic shock, such as emergency home repairs, within a year, according to The Pew Trusts. Unfortunately, more than a third of homeowners have $500 or less set aside for home repairs.

A repair like the one Shannon needed could cost, on average, $20 to $30 per foot, but up to $75 per foot, depending on the work done. Luckily for Shannon, SoCal Gas had partnered with HomeServe, a leading provider of home repair solutions, and Shannon had enrolled in HomeServe’s service line protection program.

HomeServe Offers a Solution

“When we found out there was a problem and the gas was turned off, we called HomeServe,” Shannon said. “They contacted a plumbing company to come out and determine the problem.”

Economic shock

HomeServe dispatched a licensed and insured network plumber, Frassica Inc., to Shannon’s home. The line was old and deteriorated – dating to the late 1960s when the home was constructed – and needed replaced from house to meter.

“[HomeServe] does whatever they can to make sure the customer’s necessities are met,” John, a Frassica technician, said. “HomeServe goes above and beyond to do what needs to be done; the best warranty company that you could work for.”   

The job included extensive concrete work and 250 feet of trenching, which would have cost $10,000 to $15,000, a substantial economic shock.

Save Money and Worry With a Policy

“With HomeServe, they are saving a tremendous amount of money,” Ken McCarthy, Frassica owner, said. “We’ve had to cut multiple sections of concrete and dig trenches. Some people couldn’t afford to pay for this, but that’s the value of HomeServe. For a nominal monthly fee, they’re covered when projects like this come up, and they get good value.

“These types of plumbing failures happen. I own a plumbing company, and I also have a HomeServe policy. Anyone who is a homeowner has experienced plumbing failures or will.”

Shannon knew the job would be large but didn’t realize the extent of the work.

“It was a much bigger job than we anticipated, but there was no out-of-pocket [costs],” she said. “The entire repair is being covered by HomeServe.”

Shannon was happy to have service returned, free of the worry of economic shock.

“I’m very satisfied with HomeServe,” she said. “I would absolutely recommend this type of warranty because you truly don’t know when something is going to go wrong. They came through for us and saved us a lot of money.”

EV Charging Offers Opportunities to Energy Providers

EV charging is a growth opportunity for the energy industry.

There’s a lot of chatter about electric vehicles (EV) and what they mean for energy providers. Predictions are that they will make up 7 percent of the vehicles on the road and 20 percent of new vehicle sales by 2030, but building the EV charging network will cost billions and require between 118 and 733 terawatt-hours.

Shortage of Charging Facilities

To support EVs, the country will need a network of 9.6 million Level 2 charge ports, although it’s estimated that the lion’s share – 78 percent – will be in private homes. Even so, EV charging infrastructure will have to grow by 20 percent annually to reach that goal. The U.S. will need at least 900,000 public Level 2 and DC fast charging ports that provide convenient overnight charging to meet the needs of residents who don’t have access to garages or driveways and those travelling long distances.

One of the largest obstacles to wide adoption of EVs is the absence of a strong, nationwide network. Automakers have invested in providing public charging sites, and Tesla is in the front of the pack, having provided more than 700 stations – that are explicitly made for Tesla cars and don’t accommodate other makes.

However, other automakers have formed strategic partnerships to provide additional stations their customers can use. Ford recently announced its FordPass Charging Network in partnership with Greenlots, a Shell company, and Electrify America. The partnership will unveil an ambitious network of 12,000 charging stations with 35,000 ports and should accommodate most makes. In a similar partnership, GM and Bechtel will form a corporation to build investor-funded charging stations in larger cities, targeting apartment dwellers.

Corporate Buy-In

BP and Shell also are moving into the field, purchasing Chargemaster and Newmotion, respectively. Perceiving the potential threat to their bottom line, oil companies are hedging their bets by entering into the EV charging market themselves. In addition, retailers and restaurants are looking at charging ports as loss leaders – by providing a free place for customers to charge EVs, they are encouraging them to patronize their businesses.

States are allowed to set aside funding from the Volkswagen emissions settlement for EV charging stations, and 41 states have elected to earmark $265 million toward such stations. In fact, Electrify America, a Volkswagen subsidiary formed as part of the settlement, will invest $2 billion in charging infrastructure by 2026.

In June, Michigan lawmakers decided to install EV charging stations at park-and-ride lot and state parks. Pennsylvania also is looking at encouraging EV use by prompting utilities to enter into the charging infrastructure space. Several states – California, Minnesota, Oregon and New York included – are also including utilities in their vision of an EV future.

There is a much higher adoption of EVs in many cities by drivers eager to reduce their carbon footprint, and those communities have taken note. The number of cities with 200 or more public charging points nearly doubled between 2017 and 2018, from 34 to 64. Additionally, communities with the greatest success in adapting EVs, especially those with municipal EV fleets, had strong partnerships with utilities. 

Not Just Personal Vehicles

Dominion Energy recently announced its goal of 100 percent EV school buses in its Virginia territory by 2030, and pledged to cover the difference between the cost of diesel and electric models. Dominion envisions the school bus fleet as a vehicle to grid (V2G) resource in the latter stages, sending power back during high-demand and charging during low-demand.

Duke Energy recently awarded Asheville, N.C., a $200,000 grant to cover the costs of five EV bus charging systems as part of its program to expand EV charging systems in North Carolina. The program has funded nearly 200 public charging stations and EV bus charging stations in Greensboro, N.C. The company also is expanding charging stations in South Carolina and Florida. Duke officials touted these programs as helping them determine where to invest in grid infrastructure.

Energy providers are stepping up to the plate to the tune of millions in supply and service connection upgrades and customer rebate incentives. They see the financial benefits of a shift to EVs, irrespective of how the charging infrastructure is built up – it can provide a buffer against falling load growth and the V2G model can make the grid more flexible. Since disruptors are moving into the industry, energy providers are carving out a piece of the market, so they don’t finding themselves wanting later.

Utilities are looking for opportunities to connect more deeply with customers. HomeServe helps to improve customer engagement for our utility partners through the integration of complementary home repair programs with utility initiatives such as energy efficiency and safety, offering customers greater access and choice. Partnership allows the utility to leverage HomeServe’s marketing and communications expertise to educate their customers through a variety of channels. For more information, contact us.

Energy Infrastructure Impacted by Age

Most energy customers don’t think about the electricity and natural gas that powers their appliances and heats and lights their home – unless there’s a problem. Given the age and condition of our energy infrastructure, the problems compound every year.

Through the 1980s, significant power outages averaged fewer than five per year, but that number has done more than steadily climb – it’s begun to skyrocket. There were 76 significant outages in 2007 and more than 300 in 2011.

Erosion of Energy Infrastructure Has Significant Consequences

Age and condition of the energy infrastructure cause problems to multiply every year.

Some pipelines date back to the 1880s, with most natural gas pipelines being installed prior to 1980. Pipeline breaks and refinery outages cause supply disruptions, which, in turn, lead to higher prices. Reported spills have increased from 573 in 2012 to 715 in 2015.

These soaring numbers have begun to erode customers’ trust and faith in their energy utilities – and they’re looking to find their own solutions.

The problem isn’t enough energy – in fact, with the growth of renewables, more energy is being produced than the grid can often handle, which creates its own set of problems. The issue is the age of the system. More than 50 percent of our energy infrastructure was built prior to the 1970s, and another 20 percent was built in the 1970s and 1980s.

Blackouts have cost the country’s economy billions, but addressing outdated infrastructure will cost billions more – as it stands, the infrastructure, which is a privately owned piecemeal patchwork, may be worth $876 billion. Other estimates put it at between $1.5 and $2 trillion, with a complete replacement costing $5 trillion.

The American Society of Civil Engineers has given the infrastructure a D+ because so much of the system has aged beyond reasonable use. They estimate that tens of billions of dollars will need to be invested into the infrastructure to improve it. Department of Energy estimates show that more than $12 billion must be spent to maintain natural gas pipelines, stabilize the grid and provide the capacity to handle the influx of renewable energy.

Growth In Renewables Further Stresses Grid

The demand for energy has slowed significantly as homeowners seek out energy efficiency, often for its cost savings, but more and more frequently for its environmental benefits. Over the past decade, electrical usage has been flat, and total energy use has declined by 2 percent.

The lion’s share of innovation – and customer growth – will be in renewable energy. The aging grid isn’t set up to handle the integration of renewable energy, however. Energy can’t be stored on the grid, but in the form of coal, natural gas and nuclear materials. One way to improve the integration is to upgrade the transmission network, so energy from places such as Texas, where there has been heavy investment in wind energy, can be transmitted to places without inexpensive and environmentally friendly energy.

Many utilities face maintenance and upgrade costs while having rate increases capped by regulators, and upgrading transmission lines isn’t easy or inexpensive. An answer may lie in distributed generation and microgrids to upgrade the energy infrastructure.

A microgrid’s ability to operate independently of the main grid can reduce outages, acting essentially as back-up, and being flexible enough to cover anything from a single home or business to jails, hospitals, college campuses and entire neighborhoods. Microgrids also allow connections to distributed energy generators, such as solar panels and wind turbines – and tying into a local energy source will reduce transmission losses. In addition, during a cloudy day, the connection through the microgrid to the main grid allows continued function without a loss of power.

It’s estimated the global distributed energy generation market, driven by lowering costs, will reach more than $570 billion within ten years, and North America is an attractive market. Some utilities have already begun investing billions in renewables as coal plants either age out or the profitability of constructing new ones plummets.

Home wiring systems may need upgrades

This will mean more affordable and reliable energy for rate payers – as long as their service lines and interior electrical systems are in good working order. Like the grid, many home wiring systems have reached the end of their usable lifespans. HomeServe USA can provide affordable home warranty programs to protect rate payers from the expense of unexpected home repairs. For information on a partnership, contact us.

The Costs of Moving Forward With Grid Modernization

The Costs of Moving Forward With Grid Modernization

We know that our energy infrastructure is out-of-date and customers are looking for varied and new services. However, moving from the old model of simply supplying electricity to a burgeoning one of supplying energy-adjacent services and transforming the grid into a hacker-resistant infrastructure that also accommodates renewables isn’t inexpensive.

So how will utilities – many of whom are either under PUC regulation or being undercut on prices by new retail providers – afford to keep up in this changing market? By pivoting away from high-cost generation plants and providing a modern grid.

As the grid is modernized, two things will be top of mind for utility providers: fending off hackers and flexibility. In addition to replacing and repairing decades-old gas lines and transmission wires, it will mean updating software – as the Internet of Things expands, so do entry points for hackers. Likewise, the more interconnected infrastructure becomes, the more weak points there are for cyberattacks.

Updating software in a coordinated approach is where the smart money is going. Nearly 40 energy utilities spent $60 billion on grid improvements, while spending on new power plants fell to one-third of total capital improvements spending, according to the Edison Electric Institute. Even as investment in power plants shrinks, so does the demand for power – dropping to the lowest rate in a decade – and many utilities are shuttering obsolete plants instead of replacing them.

Some companies have already begun charging modernization fees, although some PUCs have disallowed them – for now. Several utilities have requested special ratemaking for grid investments, so this isn’t going away any time soon, but utilities will have to wait and see how it plays out in each PUC where they do business.

Although the reality is that rate increases will need to be made to make the grid safer and more resilient, some utilities are reducing increases to ratepayers by having third-party companies pay to offer new services to the grid.

As utilities work to make the grid safer, customers have begun to unplug. Even as the grid becomes safer and better equipped to deal with the surge and ebb of renewables, many utilities must find a balance in net metering between the wholesale rate they want to pay and the retail rate distributed generators want. Again, where PUCs fall on this issue will have an impact on utilities’ bottom lines – and their ability to modernize energy infrastructure.

Changing our country’s energy infrastructure won’t be quick, easy or cheap – nor will it extend to thousands of homes in need of electrical upgrades from weatherheads to service panels to wiring. As smart devices proliferate and renewables become more common, how will these systems fare?

HomeServe USA offers interior electric, hot water heater, HVAC and electric service line warranties that can keep your ratepayers safe from electrical hazards in their homes, protect them from unexpected expenses and give them peace of mind. For information on this turn-key program, contact us.

The Impact of Aging Energy Infrastructure

The Impact of Aging Energy Infrastructure

Most energy customers don’t think about the electricity and natural gas that powers their appliances and heats and lights their home – unless there’s a problem.

And, given the age and condition of our energy infrastructure, the problems compound every year.

Through the 1980s, significant power outages averaged fewer than five per year, but that number has done more than steadily climb – it’s begun to skyrocket. There were 76 significant outages in 2007 and more than 300 in 2011.

Erosion of infrastructure has significant consequences

Some pipelines date back to the 1880s, with most natural gas pipelines being installed prior to 1980. Pipeline breaks and refinery outages cause supply disruptions, which, in turn, lead to higher prices. Reported spills have increased from 573 in 2012 to 715 in 2015.

These soaring numbers have begun to erode customers’ trust and faith in their energy utilities – and they’re looking to find their own solutions.

The problem isn’t enough energy – in fact, with the growth of renewables, more energy is being produced than the grid can often handle, which creates its own set of problems. The issue is the age of the system. More than 50 percent of our energy infrastructure was built prior to the 1970s, and another 20 percent was built in the 1970s and 1980s.

Blackouts have cost the country’s economy billions, but addressing outdated infrastructure will cost billions more – as it stands, the infrastructure, which is a privately owned piecemeal patchwork, may be worth $876 billion. Other estimates put it at between $1.5 and $2 trillion, with a complete replacement costing $5 trillion.

So much of the system has aged beyond reasonable use that the American Society of Civil Engineers has given the infrastructure a D+, estimating that tens of billions of dollars will need to be invested into the infrastructure to improve it. Department of Energy estimates show that more than $12 billion must be spent to maintain natural gas pipelines, stabilize the grid and provide the capacity to handle the influx of renewable energy.

Growth in renewables further stresses grid

The demand for energy has slowed significantly as homeowners seek out energy efficiency, often for its cost savings, but more and more frequently for its environmental benefits. Over the past decade, electrical usage has been flat, and total energy use has declined by 2 percent.

The lion’s share of innovation – and customer growth – will be in renewable energy. However, the aging grid isn’t set up to handle the integration of renewable energy, since energy can’t be stored on the grid, but in the form of coal, natural gas and nuclear materials. One way to improve the integration is to upgrade the transmission network, so energy from places such as Texas, where there has been heavy investment in wind energy, can be transmitted to places without inexpensive and environmentally friendly energy.

Upgrading transmission lines isn’t easy or inexpensive, especially as many utilities face maintenance and upgrade costs while having rate increases capped by regulators. An answer may lie in distributed generation and microgrids.

A microgrid’s ability to operate independently of the main grid can reduce outages, acting essentially as back-up, and being flexible enough to cover anything from a single home or business to jails, hospitals, college campuses and entire neighborhoods. Microgrids also allow connections to distributed energy generators, such as solar panels and wind turbines – and tying into a local energy source will reduce transmission losses. In addition, during a cloudy day, the connection through the microgrid to the main grid allows continued function without a loss of power.

It’s estimated the global distributed energy generation market, driven by lowering costs, will reach more than $570 billion within ten years, and North America is an attractive market. Some utilities have already begun investing billions in renewables as coal plants either age out or the profitability of constructing new ones plummets.

Home wiring systems may need upgrades

This will mean more affordable and reliable energy for rate payers – as long as their service lines and interior electrical systems are in good working order. Like the grid, many home wiring systems have reached the end of their usable lifespans. HomeServe USA can provide affordable home warranty programs to protect rate payers from the expense of unexpected home repairs. For information on a partnership, contact us.