Have you ever looked at your utility bill and said, “Geez, why do electricity prices keep going up?” Power makes the world go ‘round. We use electricity in almost every facet of our lives. We use it to fuel engines, charge electronic devices, operate the appliances that make our lives easier, and so much more. Subsequently, the demand for power keeps going and so does the cost.
While your electric bill will vary depending on several factors, like energy usage or home location, here are some common reasons why electricity prices keep going up. And a surprising cost-saving option you probably haven’t considered.
Why Electricity Prices Keep Going Up
According to data from the U.S. Bureau of Labor Statistics, the cost of electricity is projected to keep on going up. A high utility bill is not an uncommon occurrence. In fact, homeowners can usually anticipate a typical pattern. Peak times of use like extreme cold or heat, mean higher prices. But increases in the cost of electricity have become an all too common occurrence. Chances are, if you’re a homeowner you’ve looked into how to read your electricity bill, and might’ve even researched ways to conserve energy.
But what’s the real reason electricity prices keep going up? Here are a few ideas:
#1 – High Costs for Production
Ever heard it takes money to make money? Well, it definitely takes money to make power. The insurmountable costs to operate and sustain the infrastructure needed to power your home comes at a price. Currently, the U.S. generates almost 80% of its electricity through nonrenewable resources. This includes exhaustible fuels, like oil, natural gas, and even coal, among others. These are finite sources of energy that have to be harvested and refined before they’re used. Typically, this is done through burning, which releases harmful pollutants into the atmosphere.
Other than the environmental toll, another problem with relying heavily on fossil fuels and the like is fluctuating prices. Natural gas and fossil fuel prices might increase when there are constraints on the fuel supply. A perfect instance of this was during the Big Freeze in Texas. Oil production was at a standstill. This impacted Texas’ ability to transport its resources to not only its residents (widespread blackouts), but also the rest of the nation and the rest of the world. Since it was more difficult to obtain fuel, the cost of it rose. Besides that, there are other factors that might impact cost before electricity even reaches your doors. For instance, accidental damage to infrastructure or incidents during transportation. Most electrical generation is completed through the use of power plants. These have separate costs associated with operation, construction, and maintenance may also impact how much you pay for power.
#2 – Outdated Infrastructure
You might already know this by looking around your neighborhood, but the U.S. transmission and distribution system could be better. How is that your problem, you ask? Well, you wanted to know why electricity prices keep going up? A short answer is outdated infrastructure.
In 2021, the U.S power grid received a barely passing C– from the American Society of Civil Engineers. They cited antiquated infrastructure as the main reason behind this score. About 70% of the transmission and distribution lines (about 600,000 miles) are over 25 years old, according to the report. The life expectancy for these lines is about 50 years. Our electrical grids are constantly balancing the supply and demand for energy. American electrical generation reached about 3.8 trillion kilowatt hours (kWh) in 2020. We use power for everything – from industrial power plants to household appliances. But the infrastructure continuously fails to meet the demand.
According to Popular Science, “The US has more power outages than any other developed country.” And even if the power grid is struggling to meet your demand, you’re still footing the bill for its upkeep. The power grid connects you and your neighbors to power plants, which distribute electricity to your home. Consumers pay for the cost of construction of new parts of this system, as well as repairs and upkeep, operation, and enhancing cybersecurity. Here’s more information on the grid and tips for how to find out which grid you’re connected to.
#3 – Unpredictable Weather Conditions
The U.S. Energy Information Administration (EIA) predicts the cost of residential electricity in 2022 to be an “average 14.2 cents/kWh.” That’s almost 4% higher than it was in 2021! And you know what doesn’t help that figure? Unexpected natural disasters or extreme weather conditions. Electricity prices keep going up because we just can’t control the weather. In fact, we might be making it worse.
Greenhouse gas emissions (23% of it caused by our electricity generation) severely impacts the weather through global warming. Global warming ignites disastrous natural events, like hurricanes and blizzards. These climate disasters have been worsening in intensity and frequency every year. This greatly impacts the power grid’s ability to perform.
Moreover, extreme temperatures swell the demand for heating and cooling, which drives up the cost. Like those $9,000 electric bills during the Texas power outage. Unfortunately, the terrible, horrible, no good, very bad weather days are far from behind us and there’s a price to pay for them.
Solar Energy Could Make Power Affordable
So, you’ve figured out why electricity prices keep going up. But do you want them to keep going up on you? There’s another way to power your home, a sunnier alternative. More and more, homeowners are discovering solar savings from net metering programs to federal solar incentives.
Consult a Solar Energy Specialist today to find out if solar energy could keep your electricity prices from going up.