When Less Expensive Electricity Costs More
Why do cheaper renewable energy costs and increased renewable energy usage in California equal higher electricity rates?
California electric rates have gone up 50% in the past seven years [1]. During that same the time cost of generation has gone down [2] and the generation mix has moved to less expensive generation options. [3]. Combining these three charts it is clear that something needs to change.
For the 2023 rate increases, the California Public Utilities Commission and California Public Advocates Office office identified 3 reasons for the most recent rate increase. A spike in natural gas prices, the costs of maintaining transmission lines, and, surprisingly, the increased adoption of solar power.
From the report, "Customers generating their own electricity by using solar power systems reduce the amount of electricity that a utility sells, which the CPUC and Cal Advocates have both concluded leads to utilities’ increasing their rates to compensate." [1]
A key question is what needs to change to reverse the trend? How can other regions prevent this same issue?
Our belief is that space based solar power can provide power when and where its needed while minimizing or reducing the reasons for increased electric bills. Cheaper power generation alone is not the solution.
References
[1] - https://www.auditor.ca.gov/reports/2022-115/index.html
[2] - https://about.bnef.com/blog/cost-of-clean-energy-technologies-drop-as-expensive-debt-offset-by-cooling-commodity-prices/
[3] - https://www.energy.ca.gov/news/2023-08/data-show-clean-power-increasing-fossil-fuel-decreasing-california
