Why Are Energy Costs So High this Winter?
Feb. 16, 2023
Have you noticed a spike in your energy costs this winter? You’re not alone. Gas and electricity costs are rising across the country; according to inflation data released by the U.S. Bureau of Labor Statistics, electricity costs rose by 14.3% in 2022 and overall energy costs rose by 7.3 percent.
There are a few reasons why we’re seeing such high energy costs in 2023:
Global Supply and Demand Impact Energy Costs
High electric bills are due, in large part, to global supply and demand. Countries around the world rely on fossil fuels to meet their energy needs, and the US is no exception. We also depend heavily on natural gas to produce electricity, which means electricity costs are tied to natural gas prices.
Until about 2016, this wasn’t a huge problem because the US didn’t export natural gas overseas, so prices were mainly dependent on domestic supply and demand. Exports grew when new technologies made it easier to convert natural gas into liquified natural gas (LNG) and US companies began investing in LNG terminals. Now, much of the LNG we produce in the US is exported and the global market has a greater impact on US electricity costs.
Being so easily influenced by global supply and demand is problematic because it allows global issues, like Russia’s war on Ukraine, to significantly impact energy costs.
Laws Restrict Fossil Fuel Movement Within the US
Although the US is a major producer of natural gas, moving fossil fuels from one region within the country to another isn’t easy. Building new pipelines threatens ecosystems and incentivizes fracking, which creates roadblocks for pipeline projects, and rightfully so. This does, however, make it more difficult and expensive to transport natural gas within the US.
The Jones Act also created challenges when it comes to moving natural gas and oil around the US. The Jones Act was instituted after World War I and requires ships carrying goods between US ports to be built in the US, owned by a US company, and staffed by an American crew. This is great for the US shipbuilding industry and maritime workforce, but it also drives up energy costs.
The Electric Grid Needs to Be Updated to Handle Renewables
Clean energy sources like solar and wind power have the potential to reduce high electricity bills and make energy costs more affordable for all Americans. But connecting renewables to the grid is difficult and it needs to be modernized in order to support new sources of clean energy. New incentives established by the Inflation Reduction Act are making grid-scale renewable projects more affordable, so hopefully, we will see a shift soon.
Rooftop Solar Is the Answer to High Electricity Bills in Massachusetts!
Installing residential solar panels on your roof is the best long-term solution to high Mass electric bills. Solar panels reduce your energy bills by allowing you to generate your own power, so you can buy less from the grid and stabilize your costs. If you make the switch to all-electric heat pumps, you can also use solar to lower your heating bills, helping you save even more money. It takes about 5-9 years to break even on a home solar installation, but once you get past that point, you’ll have turned your roof into a power plant and will be generating most or even all of your electricity for free.
How much solar panels save on electricity bills depends on the size of your system and how much energy you use. Boston Solar installs custom solar systems and can design an array that meets your electricity needs, whether you want to cover some of all of your power needs with solar. We are the leading solar installation company in Massachusetts with over 10 years of experience and 5,000 installs under our belt, and we’d love to help you go solar.
Reduce your high electric bills with solar. Call 617-858-1645 or contact us to schedule a free consultation.