The Future of Energy Part I: Generation
The American electric utility industry is at a crossroads. Rapidly advancing technologies and shifting regulations are changing the way many large corporations are sourcing their electricity, with more and more opting to either generate their own renewable energy or to purchase it from non-utility third parties. How “at risk” is the nation’s residential electricity load?
Will Americans be satisfied if their utilities shift their energy generation mix toward renewable sources, or should utilities expect the momentum for distributed generation to increase among residential customers? In our most recent Energy Pulse study, we asked a series of questions to explore American consumer expectations regarding electricity generation and home energy technologies. This post is Part 1 of a two-part series on the future of energy that lays out America’s vision for electricity generation.
Americans want renewable energy
Americans want their electricity generated via renewable means (solar, wind, etc.). Seventy-two percent say that it’s important that their electric utility make an effort to generate or purchase at least some part of its power through renewable energy sources (now).
And they expect a dramatic shift in utility generation practices within the next 10 years, with approximately 60% expecting utilities to provide mostly renewably generated electricity to their customers. Only 26% expect our nation’s electricity to still be primarily generated via coal-fired power plants, and only 31% think most electricity will be generated via nuclear power.
They are quite divided on the role utilities will play in 10 years. Almost half embrace the idea of a new, much more distributed energy generation grid – they expect homeowners to be generating most of the country’s electricity with their own solar panels or small wind turbines.
The graph below shows the percentage who agreed/strongly agreed with each statement:
It’s important to note that those who desire a more distributed model for renewable energy generation aren’t planning to wait 10 years – they say they’re likely to act within the next year.
- While current (self-reported) ownership of solar is low (around 4%), the percentage saying they’re likely to purchase solar panels within the next year is 27%!
- Current ownership of other renewable energy solutions like geothermal or small wind turbine systems is even lower (3-4%), but approximately one-quarter say they’re likely to install a geothermal heating/cooling system, and 12% say they’re likely to install a small wind turbine generation system within the next year.
Obviously, there’s a great deal of aspiration in these numbers – particularly regarding plans for solar panel purchases. But the desire shouldn’t be ignored.
Alternatively, a similar percentage of the market (20-30%) fall into a “do it for me” camp, with 31% saying they’re likely to start participating in their utility’s green power program and 22% likely to lease or subscribe to participate in a community solar program.
Political and generational differences
There are political differences of opinion regarding the role renewable energy will play in 10 years, but the divide is not as great as you might expect. Fifty-three percent of Republicans agreed with the statement, “Believing that we can meet all of our energy needs from solar power is just wishful thinking” (compared to only 35% of Democrats). However, only 32% of them expect the status quo (most of our electricity being generated via coal) to continue. In fact, the majority of Republicans agreed that most of our electricity should be generated by utilities through solar fields and/or wind farms (57%).
There are also important generational differences in this data. Millennials are even more engaged in renewable energy than other age groups – they’re significantly more likely to say they have already installed renewable energy solutions than other generational cohorts. For instance, 5% say they’ve installed roof or ground-mounted PV solar panels to generate electricity for their home (vs. 3.5% overall). And they’re significantly more likely to say they plan to do so within the year:
- Install roof or ground-mounted PV solar panels (35% vs. 27% overall)
- Install a geothermal heating/cooling system (36% vs. 25%)
- Install a small-scale wind turbine (33% vs. 23%)
Finally, looking back to Eco Pulse 2015, we asked likely new home buyers (primarily Millennials) to tell us the features they expect their next home to have. A significant percentage wanted:
- Roof or ground-mounted PV solar panels to generate electricity (36%)
- An energy storage system to store excess energy produced by solar panels (24%)
What this means for utilities
Many Americans are unhappy with their electric utilities and desire change:
- 45% of Americans are less than satisfied with their electric utility.
- 35% agree that if the option were available, they would be likely to sign up to get their electricity from a non-utility alternative provider like SolarCity, Google or Comcast (up from 22% in 2014).
While we see no significant difference regarding the income of those “planning” to add solar panels to their homes, we know the reality is that higher-income residential customers will be more likely to act on their aspirations than low-income customers. We don’t need our nation’s “haves” opting out, leaving the “have-nots” to become the primary supporters of our electric grid. Many of these likely “defectors” would become more satisfied and likely stay put if their utilities engage more aggressively in renewable energy generation. But the window for action is rapidly closing.
Next time, I’ll discuss the impact of advanced home energy technology adoption on the future of energy.