USA Clean Energy Association is a premier solar energy service center, providing a full spectrum of solar products and services. In the following article, USA Clean Energy Association discusses how the volatile market is affecting energy costs worldwide.
In recent years, inflation has been rising worldwide, and small businesses have been among the hardest hit.
For example, the Consumer Price Index (CPI) rose by 9.1% in the United States in 2022 from 2021 – the most significant 12-month growth since the 12 months ending in November 1981. According to the US Energy Information Administration, energy costs are up 11.6% from last year.
The root cause of inflation is complex and can be traced back to several factors, including global economic conditions, geopolitics, and monetary policy. For consumers, however, the bottom line is that prices are rising faster than incomes explains USA Clean Energy Association.
So what can be done to offset these increases? What are inflation’s actual causes?
Energy Price Increases Fuel Price Inflation
The average nominal retail power price paid by American residential electric users increased in 2021 by 4.3% from 2020 to 13.72 cents per kilowatt-hour, marking the first highest pace of growth since 2008. It is mainly due to the increasing cost of fossil fuels, natural disasters, and geopolitics. Consequently, USA Clean Energy Association says that price hikes are not only felt when gassing up vehicles but also through a home energy bill.
The country must focus on alternative sources to lower medium to long-term costs and improve the community and grid resilience. It includes investing in renewable energy, such as solar and wind power. Additionally, it is essential to reduce reliance on fossil fuels, which contribute significantly to climate change.
Ways To Save Money on Energy at Home on a Budget
USA Clean Energy Association says that homeowners can often save on their energy consumption by up to 30% just by making a few suggested improvements to their homes. The first step towards efficiency and savings is an energy audit. It entails a series of inspections conducted by a specialist to check for air leaks, insulation levels, and the effectiveness of heating and cooling systems.
Homeowners can also find relief by investing in a home energy management system (HEMS). These systems are software platforms enabling users to monitor their consumption and output. In addition, USA Clean Energy Association says that homeowners can use HEMS to keep an eye on their primary sources of usage, such as HVAC, water heaters, and large appliances.
HEMS can help monitor solar production in real time and make adjustments accordingly. For example, suppose the system detects a home’s electricity demand is higher than the solar panel’s production at a given time. In that case, it will automatically purchase power from the grid at the lowest possible rate to help avoid peak demand charges while still meeting energy needs.
Solution-Providing Energy Transition
The current shift away from fossil fuels and toward solar and storage, including EVs, provides right now effective solutions to inflation and rising energy prices that were unimaginable even a decade ago.
Though basic home improvements can help you save money, solar and storage is a surefire way to help protect against these rising prices, as they are not subject to the same price fluctuations as fossil fuels. As such, countries moving away from oil and gas are opening new possibilities for powering homes and businesses.
USA Clean Energy Association reports that solar and storage can also provide other benefits, such as increased energy security. For example, the US relies heavily on imported oil, which makes the country vulnerable to supply disruptions. Solar and storage can help reduce this dependence on imported oil.
The current situation in Ukraine is a prime example of how geopolitics can be a weakness. Russia’s invasion led to a sharp increase in oil prices, with global prices rising to more than $100 per barrel.
The need for an energy transition is urgent. The climate crisis requires rapid and deep reductions in greenhouse gas emissions, while air pollution from burning fossil fuels takes a heavy toll on public and planet health.
The energy transition presents an opportunity to build a cleaner, more equitable, and prosperous future. USA Clean Energy Association states that a comprehensive switch to renewables would create jobs and spur economic growth while reducing pollution and slowing the pace of climate change. The transition offers solutions to some of humanity’s most pressing challenges.
How Renewable Energy Deflates Prices
Renewable energy costs have decreased steadily for the past few years, while oil and gas prices have been volatile. It has led many experts to believe that renewable energy will play a key role in stabilizing global power prices.
Solar is one of the most promising renewable sources of energy. Unlike oil and gas — commodities linked to natural resources — solar energy is derived from a technology that has seen significant advancement over the past 50 years.
Renewable energy sources provide a way to reduce global power price fluctuations. In the future, we can expect to see increased use of renewable sources such as solar, wind, and hydropower to stabilize the energy market. So consider going solar and getting a headstart as countries scramble to replace fossil fuels in the following decades.
