Energy experts agree America’s aging electricity grid needs a facelift. The grid was built in the middle of the 1900s and no longer optimally serves the country’s electricity needs. The way energy is generated, transmitted, stored and consumed is changing, and so should our electricity grid, argues SolarCity, in a white paper published earlier this year.
The solar company, which plans to merge with Tesla (Elon Musk’s other company), believes today’s society necessitates an energy grid that reduces consumer costs, minimizes greenhouse gas emissions, increases energy security, strengthens safety and resiliency and provides ratepayers with the opportunity to generate their own electricity. They claim to have the solution.
Today, America’s electricity grid gets the vast majority of its energy from large power plants, controlled by multi-billion-dollar corporations. Regulators set energy prices and determine where and when power facilities should be built. Fossil fuels, which don’t face intermittency problems associated with renewable energy and allow energy companies to ramp power up or down to meet demand at any given time, make up the majority of America’s energy mix.
The current electricity system favors large utility companies, poses prohibitive barriers to entry and stifles competition, says SolarCity. It also causes unnecessary greenhouse gas emissions, which make up 30 percent of America’s carbon footprint. The share of renewable energy in America’s electricity mix is increasing; however, SolarCity argues that renewable sources are incorporated in an ad hoc fashion that doesn’t account for their unique nature.
The new system, they say, should be designed to optimally incorporate Distributed Energy Resources (DERs) – like wind and solar – increase transparency and analytics and maximize the most efficient electricity generation.
Regardless of how it’s done, updating America’s aging electricity grid will require significant investment in the near future. The Edison Foundation estimates the retrofit would cost $1.5 to $2 trillion by 2030, a substantial increase from investments made in the last several decades.
SolarCity argues that, given the size and impact of the aforementioned investment, it’s critical that decision-makers implement a system to meet America’s future energy needs in a cost-effective, environmentally-conscious manner.
With the current electricity grid, utility companies are motivated to “build more to profit more” rather than create the most efficient system for consumers, says SolarCity. The current structure is in opposition to minimizing energy use and reducing greenhouse gases. In fact, utility companies view distributed energy sources as a cost rather than a benefit because they aren’t profiting from producing the electricity.
The system SolarCity envisions would increase competition and provide individuals with agency to control their own power supplies in smaller distributed formats. They suggest the formation of an independent distribution system operator (IDSO) to control “planning and sourcing” but not the generation facilities.
SolarCity conducted a cost benefit analysis to quantify the effects a DER network would have on society, and found that in California alone, the transition would produce an estimated $1.4 billion per year by 2020 in added social benefits. They then compared this with Pacific Gas & Electric’s (PG&E’s) planned distribution network. Using PG&Es numbers, they calculated the DER system would save consumers over $100 million.
Musk’s solar company is not alone. Other energy industry experts concur that distributed generation will grow in the near future. The U.S. government is also investing in distributed energy projects. If the experts are right and trends continue, it’s only a matter of time before it will be the norm for American citizens to generate their own renewable electricity.