Although we may be store for a period of lower gas prices, CEA President David Holt examines the impact elevated prices have had on families and local businesses this year.
“The cumulative impact of inflation is adding up, and we are seeing some changed habits that maybe we didn’t expect we’d see,” Holt said. “I think that when you look at inflation and the impact it’s having on the average family, it’s removing some disposable income they otherwise would have.”
There are four principal ways solar energy is deployed in the country: universal or utility-scale solar, community solar, private residential solar, and private third-party leased. Solar power is growing nationwide, but what does the different terminology mean?
Universal Solar – A large solar plant that provides the benefit of fixed-priced electricity during peak demand periods when electricity is the most expensive. They can utilize several different types of solar technologies, including concentrating solar power (CSP), photovoltaics (PV), and concentrating photovoltaics (CPV). According to the Solar Energy Industries Association, there are over 3.6 GW (gigawatts) of large, utility-scale solar plants in the U.S. with significant construction underway. Options like community solar are expanding around the country to offer customers the opportunity to buy shares of a large-scale, universal solar project if they cannot put a system on their residence or if they rent their home or apartment. Universal or utility-scale solar is the easiest, fastest, and most cost-effective way for everyone to experience the benefits of solar energy due to its economy of scale.
Community Solar – These facilities are built by third-party developers, municipalities, Rural Electric Coops, and other larger Investor-Owned Utilities. They often don’t exceed five megawatts. Community solar is most beneficial to urban dwellers, renters, small businesses, households, and local governments who want to participate in using solar energy but cannot due to several reasons, which may include: they rent/lease their property; their homes or businesses are excessively shaded, or the orientation of their roofs or property makes installing solar panels uneconomic. Via programs like virtual (or group) net metering or direct power purchase agreements (PPAs) with a solar developer, members of community solar programs can receive credit for solar power generated by residential, commercial, or municipal solar systems. By opting into this system, everyone shares the costs and the benefits without ever having to wholly own a private facility. Even large-scale utility arrays offer buy-ins to their programs so these same individuals and organizations can reap the benefits and help solar flourish in their community or state.
Private Solar – These solar installations are physically owned by customers and residents who pay upfront installation costs. There are many federal, state, and local incentive programs for many of these customers to help defray the costs and, in many cases, offer substantial paybacks over the system’s life. All residential customers who own private solar can receive a federal tax credit equal to 30 percent of the solar facility’s installed cost. In addition, many customers receive one or more of the following incentives:
State income tax credits and/or deductions,
State and/or local sales and/or property tax exemptions,
State renewable energy payments or rebates,
State Public Service Commission (PSC)-approved incentives provided by the utilities they regulate; and importantly
Private solar credit programs like “net metering” where generated power is used on-site (typically from the rooftop of a house or business), and excess power is fed into the public energy grid and purchased by the energy company from the private customer on a per-kilowatt-hour basis.
Third-party leased – This is where individuals, businesses, or municipalities can finance the cost of private solar energy development, based primarily on two models. A private customer can sign a traditional lease and pay for the use of a solar system, or the customer can sign a power purchase agreement (PPA) to pay a specific rate for the energy generated each month. When a customer utilizes this model, they are, in essence, transferring their incentives to a leasing company that handles the upfront costs of installing the system. Leasing companies also generate additional financial incentives through the tax code with the ability to accelerate the depreciation of business expenses.
CEA Southeast Executive Director Kevin Doyle examines how Florida is maintaining low electric rates while continuing to invest in the energy grid and bringing on new sources of environmentally responsible power generation.
While keeping rates low, Florida is doing better than many states at ensuring utilities focus on environmental sustainability and emission reduction. Increasing use of solar electricity, modernizing infrastructure and implementing innovative technologies to improve efficiency are just a few of the enhancements that are helping Florida lead in overall environmental improvement.
CEA President David Holt joined KTRH to discuss how enhancing our country’s refining infrastructure can help ensure consumers have access to affordable transportation fuels.
Many factors, including laws, regulations, politics, and other financial considerations we may not be aware of, significantly influence the affordability and reliability of the electricity our local utilities provide. However, knowing a little more about how these factors affect the cost of lighting, heating, and cooling our homes or make it more or less likely we suffer blackouts can help us see whether political or regulatory actors are helping or hurting.
Source: Broad River Electric Cooperative, Inc.
Like many large projects – from highways and bridges to skyscrapers and stadiums – the cost to finance construction is enormous. Instead of paying for these projects in cash, both states and businesses borrow large sums of money, which they guarantee will be paid back with interest. Utilities do the same to maintain, build, and expand the network of poles, wires, and transformers that ensure that the lights turn on when you flip the switch.
When borrowing money, there is a unique factor for regulated utilities that makes the cost of debt – the interest rate – even more important. Regulated utilities need approval from regulators to recover their investment in projects that keep the lights on. This means they have to pay using both equity (cash) and debt (loans) in return for ensuring that there is safe, adequate, and reliable electric service.
Let’s put that in personal finance terms. If you have to make a big purchase like a car, you want to have the lowest possible interest rate, right? Of course. And just like us, the better our credit, the better we appear to lenders, and the lower our interest rates are. The same principles apply to utilities.
When the legal and political factors that influence the regulatory oversight of utilities in a state are more favorable and predictable, utilities are considered a good investment by creditors. Well-managed utilities have strong credit ratings, which correspondingly leads to a better ability to borrow money. This is similar to why we get credit card limit increases when we spend responsibly and pay on time. For utilities, this lowers their interest rate and our electric rates, too.
On the flip side, if the regulatory environment is volatile and unpredictable, a utility’s credit rating could be downgraded, which increases its cost to borrow funds by increasing interest rates, making investments more expensive for consumers. Without predictable and favorable conditions, utilities are less able to invest. Additionally, borrowing costs could be so high that they slow down utilities’ investments in the grid, reducing reliability and preventing new resources from entering the market.
While the funding, financing, and borrowing methods are indeed more complex than we have illustrated here, the fundamental idea remains the same. A strong and predictable legal, regulatory, and political environment is not just important to utilities—it’s also something we, as consumers, can influence. By understanding and advocating for a responsible, fair, and honest regulatory environment that prioritizes affordable, reliable, and environmentally responsible energy, we can get it.
As politically driven actions like favoring specific energy sources or mandating the elimination of others continue to crash into the math and physics required to reliably and safely run a grid 24/7, we run a greater risk of blackouts and brownouts. Right now, parts of the U.S. and Canada are at risk of summer blackouts, and with all the changes being made, those risks could make their way into the winter, too.
We can avoid that if we return to responsible policies that place reliable, affordable energy where it should be – as part of the basic foundation of our economy, national security, and way of life.
Understanding utilities can be difficult, which is why it is vital for our regulators to understand the system and how it works. The New England Public Utility Commission Chairs recently sat down at the New England Energy Conference and Exposition to discuss their views on regulating utilities as state climate goals and energy priorities evolve.
Consumer Energy Alliance (CEA), the leading advocate for sensible energy policies that provide all available energy choices for families, small businesses, manufacturers, and farmers, applauds Louisiana Governor Jeff Landry and the Louisiana Legislature for enacting bills which advance strong, bipartisan initiatives to maximize energy choices and encourage carbon capture and storage for continued commercially feasible environmental improvement for businesses and communities. Louisiana keeps building on its record of being a leader in energy freedom and development.
“Only six months after winning the ability to permit its own carbon storage wells from the Environmental Protection Agency, Louisiana keeps showing that it intends to be a continued nationwide leader in domestic energy production and a model for the rest of the world for pro-business, market-based carbon management and environmental technology. These new laws are important steps in the right direction to not only decrease carbon emissions, but to create and sustain family-wage jobs for generations all across Louisiana’s business community, while increasing public safety, transparency, and community engagement,” CEA Gulf Coast Deputy Director Shawn Waldron said.
CEA actively supported multiple bills throughout this session – including House Natural Resources Committee Chairman Brett Geymann’s package of legislation that protects the property rights of landowners engaged in leasing for carbon storage.
“With the enactment of these bills, coupled with Governor Landry’s executive actions to streamline permitting, Louisiana has truly positioned itself as a national leader in carbon capture and storage development, attracting billions in economic investments to the state and ensuring these operations are done safely and effectively,” Waldron said.
Governor Landry also recently signed House Bill 515, which preemptively bans the enactment of vehicle mandates based on engine type. This piece of legislation – supported throughout this session by CEA – ensures that Louisiana families and business have the right to choose which kind of vehicle they choose to drive, and that car dealerships, many of which are small businesses, are not burdened with the additional costs of supplying electric vehicles that their buyers do not want.
This legislation advances sound policies that favor both consumers and energy choices, protecting generations of industrial jobs, keeping manufactured products affordable for businesses of all sizes, and maintaining low energy prices. CEA supported HB 937 (protects landowner liability), HB 966 (provides for a unitization process for geological storage) and HB 492 (protects landowner rights related to eminent domain).
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About Consumer Energy Alliance Consumer Energy Alliance (CEA) is the leading voice for sensible energy and environmental policies for consumers, bringing together families, farmers, small businesses, distributors, producers, and manufacturers to support America’s environmentally sustainable energy future. With more than 550,000 members nationwide, we’re committed to leading the nation’s dialogue around energy, its critical role in the economy, and how it supports the vital supply chains for the families and businesses that depend on them. CEA works daily to encourage communities across the nation to seek sensible, realistic, and environmentally responsible solutions to meet our nation’s energy needs.
CEA’s Midwest Executive Director, Chris Ventura, explored some of the challenges consumers face if they want to generate their own electricity form solar panels with CNET.
“For the vast majority of people out there, it’s going to take some time,” Ventura said. “Unlike an iPhone, where it doesn’t matter where you live, if you love renewable energy and you want to put a solar panel on your roof, you can do that if you own your home. But if you’re a renter or living in a multi-family housing unit or a condo, you don’t have those opportunities.”
RICHMOND, VA – In response to Virginia Governor Glenn Youngkin’s and Attorney General Jason Miyares’ announcement that Virginia will not be adopting California’s car ban, Consumer Energy Alliance’s Southeast Executive Director Kevin Doyle issued the following statement:
“We applaud Governor Youngkin and Attorney General Miyares for endorsing consumer choice in Virginia’s automotive marketplace. Virginians should be able to purchase the vehicle that fits their mobility needs, not the needs of unelected California regulators by banning the purchase of new gas-powered cars and trucks.”
“For a fleet of 7.6 million electric vehicles in Virginia, this would have meant building four additional Coastal Virginia Offshore Wind Farms to generate the necessary electricity this mandate would have required.”
CEA’s 2023 Freedom to Fuel: Consumer Choice in the Automotive Marketplace report details how electric vehicle mandates will force consumers into paying more in overall transportation costs and create potentially catastrophic pressure on the electric grid. It also examines key constraints that must be addressed by policymakers before widespread EV adoption can successfully occur, including infrastructure build-out, the ability of electric generation to meet increased demand and critical mineral scarcity.
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About Consumer Energy Alliance Consumer Energy Alliance (CEA) is the leading voice for sensible energy and environmental policies for consumers, bringing together families, farmers, small businesses, distributors, producers, and manufacturers to support America’s environmentally sustainable energy future. With more than 550,000 members nationwide, we are committed to leading the nation’s dialogue around energy, its critical role in the economy, and how it supports the vital supply chains for the families and businesses that depend on them. CEA works daily to encourage communities across the nation to seek sensible, realistic, and environmentally responsible solutions to meet our nation’s energy needs.
With Florida evaluating it’s energy policies, CEA’s Kevin Doyle examines how consumers can benefit from a diversity of sustainable energy resources.
“I think what Florida has proven is that you can have a diverse fuel mix, which has to include natural gas, but you can promote solar and nuclear and different energy sources,” Doyle said.
In the rapidly evolving global energy landscape, one metal is emerging as a critical player: copper. Known for its excellent conductivity and versatility, copper is essential in numerous industries, particularly those driving the transition to renewable energy. Copper is now worth its weight in gold, with criminals even trying to cash in on its increasing value. But what’s behind the soaring prices of copper, and why does the metal have an indispensable role in our energy evolution?
The Essential Metal for a Cleaner Energy Future
Copper is more than just a penny’s worth in today’s economy; it’s a fundamental part of modern infrastructure. From electric vehicles (EVs) and power cables to wind farms and solar panels, copper is crucial to advancing renewable technology, transporting that energy, and even storing it for later. The metal’s high conductivity is ideal for efficient electricity transmission, a key requirement for EVs and renewable energy systems. For instance, EVs need about four times more copper than traditional gas-fueled cars. Wind and solar farms also require significantly more copper than coal power plants.
As communities look towards electrification, the demand for copper is poised to skyrocket. By 2031, it’s projected that over 36 million metric tons of copper will be required annually to bolster electrification initiatives. However, the supply is anticipated to fall short, creating a significant gap that could have profound implications.
Producing enough first-generation renewable technology to replace fossil fuels would take 4.3 billion tons of copper, according to Simon Michaux, an associate professor of geometallurgy at the Geological Survey of Finland. Adding insult to injury, Robert Bryce notes, “At current rates of production, that much copper would take 180 years (to produce).”
The Supply and Demand Challenge
Various factors are fueling the escalating demand for copper. The Inflation Reduction Act, for instance, has channeled federal funds into green energy and electrification projects, amplifying the need for copper in all of the anticipated renewable programs championed by the Administration. As of May, copper was trading at over $4.65 per pound, a significant surge from previous years, with expectations of further price hikes.
However, the supply side faces considerable challenges. Mining companies are struggling to keep up due to a shortage of workers, regulatory hurdles, and environmental and social concerns. Opening new mines is expensive and time-consuming. That’s because getting a mining permit in the U.S. takes, on average, 7 to 10 years to secure – one of the world’s longest permitting processes – and once a permit is issued, it still often takes around 10 more years before minerals are being produced. Moreover, high-grade copper resources
are not abundant and are typically located in geographically and politically challenging regions. So much of what is left is low-grade and does not meet the standards needed for manufacturing.
While high-grade copper is still out there, it would benefit our own communities at the detriment of others, mostly in impoverished areas of Chile and Peru — two of the largest copper-producing countries in the world.
Industry Response and Future Outlook
The mining industry has seen a wave of consolidation in response to the looming shortage. Major international companies like Glencore, BHP, Rio Tinto, and Newmont are acquiring other mining operations to access copper deposits quickly. Yet, these mergers cannot produce copper without an operating mine, and new mines will be necessary. As of February 2024, the price of copper was $8,304.95 per metric ton. Analysts predict that copper prices would need to rise to $15,000 per metric ton to attract the necessary investment in new mining projects – a 57% increase.
Despite these efforts, the path forward is full of obstacles. Environmental and social scrutiny is increasing, making opening new mines more complex. In spite of the need, the Biden Administration canceled leases for copper and nickel mining that had been held for over 50 years. Shortly after, the Administration paused mineral leasing on over 200,000 acres of land in the Superior National Forest, seeking a 20-year prohibition on mining, which it enacted in January. In response, companies like Tesla are attempting to reduce copper usage in their products, but such changes may not suffice to meet the growing demand.
Copper’s vital role in renewable energy technology and electrification cannot be overstated. Copper carries 100% of its energy current than any other metal, making it extremely efficient and essential for electric vehicles, renewable energy systems, and modern infrastructure. However, the current supply-demand imbalance drives up prices and creates uncertainty in industries that utilize the metal. To meet the escalating demand, substantial investment in new mining projects and innovative solutions to reduce copper usage will be essential. As we navigate this complex landscape, the future of copper will significantly influence the pace and success of the global energy evolution.
Two university professors from Michigan and Cornell break it down further here, highlighting all of the areas that will require copper to advance our national goals. As we continue to create mandates and reduce consumer choice, there will continue to be unintended consequences. Consumer Energy Alliance continues to advocate for responsible choices that balance our need for energy and environmental protection.