Utility prices in the Northeast are rapidly rising
Sunrun Team· 5
Global events are leading to local price increases
- Disruptions to the supply chain are causing utility rates to rise
- These disruptions are a result of various events from across the globe
- Solar energy can shield people from continuously rising rates caused by events outside of their control.
When we’re reliant on goods or services from around the world, a disruption hundreds of miles from home can be felt directly in whichever pocket you keep your wallet in. Recently, the supply chain disruption1 has been all over the news, and you’ve likely seen it reflected in prices as well. You probably notice them every time you drive past a gas station. What you may have missed though, is similar issues have caused the price of natural gas to spike as well, resulting in higher utility rates and higher energy bills this winter.
What’s causing utility prices to rise
While it varies by location and utility, people across the Northeast will soon experience higher costs to heat their homes—right as winter is hitting. Some in New Hampshire will experience their rates being nearly doubled.
Others in Connecticut and Massachusetts could experience price spikes of 22% and 14%, respectively. So what’s going on here?
Turns out, a number of things residents in the Northeast may have heard of, but didn’t think they’d be affected by. Remember the freeze last February that left millions of Texans without power? That did a number on their natural gas supply as well, as both output in the state diminished and demand rose. The result was the largest monthly decline of natural gas production on record in the U.S.2
Directly to the south and east of Texas, another natural disaster struck: Hurricane Ida. Most headlines focused on the damage done to Louisiana inland, causing massive electrical grid failures across the state. But it wasn’t any better offshore, with 94% of oil and natural gas production being forced to a halt as a result of the storm.3
Simultaneously, events across the globe were affecting the supply of natural gas. (Remember the globalization discussion above?). Europe had far less wind than typical, meaning far less energy was produced by wind turbines.4 It was also the driest summer in 70 years,5 meaning less hydropower was produced. As a result, people across the continent relied on natural gas for their energy needs more than expected.
To top things off, Russia has limited the amount of natural gas it’s producing and sending to Europe.6 Add all of these things up, and it becomes a simple economics issue. There’s higher demand, but lower supply. Thus, the prices everywhere are going up, even if the Northeast didn’t directly go through any of those scenarios.
How solar combats fluctuating energy markets
Here’s where we come full circle. As stated previously, we’re not trying to explicitly make the argument that globalization is bad. But when factors out of your control from hundreds, if not thousands, of miles away start affecting your bank account, it can be downright infuriating. Fortunately, there’s a bright side: you already have the ability to gain energy independence.
Solar panels allow you to generate your own energy, at a rate that won’t change due to market fluctuations. In fact, when energy prices rise again (and they will) it could even benefit you because many utilities buy excess solar power at a higher rate. Plus, unlike the wind and hydropower issues that affected Europe last summer, the sun is one thing we know we can rely on. If we can’t, Earth has a bigger problem to worry about than energy prices.
Many people also give their families extra peace of mind by pairing their panels with a home battery system. This allows you to store excess energy to be used in the event of a power outage, keeping your house running even if the grid goes down.
All of the issues leading to utility rate spikes are indicative of larger, systemic issues with the way we get our energy that won’t be going away any time soon. Fortunately for you, the power to have your own power is in your hands.
The time to go solar is now
While solar panels and battery storage can be a significant investment, solar companies like Sunrun offer flexible financing options and solar plans for as little as $0 down. While solar panels can’t change the weather, they can help you ride it out.
Every winter day is a chance to power through life from the sun. Start taking control of your own energy and keep powered through extreme weather conditions. Get in touch with one of our expert Solar Advisors today.
- 1. What’s causing America’s massive supply chain disruptions?
- 2. February 2021 cold snap triggers largest monthly decline in U.S. natural gas production.
- 3. Ida’s fury hits U.S. oil production, gasoline supplies.
- 4. UK energy titan says low wind, driest conditions in 70 years hit renewable generation.
- 5. UK energy titan says low wind, driest conditions in 70 years hit renewable generation.
- 6. Russia’s Gas Limits Pose Increasing Concern, U.S. Envoy Says.