With finite stores of fossil fuels and rapidly evolving alternative energy sources like solar panels and wind turbines, renewable energy figures to play an increased role in future electricity markets.  However, these renewable electricity sources lack the necessary consistency and efficiency to compete with traditional energy production.  In addition to problems like cloudy days and stagnant winds, energy storage represents a major hurdle for proponents of renewables.

Enter the Tesla Powerwall.  Already a leader in electric car production, Tesla has begun marketing a rechargeable lithium ion battery sufficient to power a residence.   The Powerwall allows individuals to sequester and store energy generated from personal solar panels. With Tesla’s new battery, consumers can maximize the benefits of their solar energy systems.

In May of 2015, Forbes magazine estimated that modern solar panels combined with a Tesla Powerwall could provide electricity for 30 cents per kWh.  This is more than twice the average national electricity rate of 12.5 cents per kWh.  Until solar panels become more efficient and can compete with traditional energy providers, the impact of these technologies will be limited.  However, evolving technology will make renewable energy sources cheaper and more effective.  Once these systems can offer lower prices, many consumers will be able turn their homes into independent energy generators.  Consumers may then literally truly get off the grid.

Giving individuals the option to unplug from the central electric grid injects many different legal issues into energy markets.  For instance, public utilities rely on a state-created monopoly and a captive consumer base to keep prices low.  If consumers are able to quit paying utilities for their electricity needs, utilities essentially lose their monopoly.  Without such economic advantages, the entire regulatory scheme may be compromised.  Public utility commissions will then have to respond, perhaps by either lifting price regulation on energy generators or subsidizing utilities for the diminished market share.

This may also invoke some social justice and energy access issues.  Solar sequestration systems will certainly require significant upfront costs.  Lower income consumers will not be able to afford to purchase the necessary equipment.  Thus, they will not be able to enjoy the benefits of this evolving technology.  Certainly, public utility commissions will have to consider the implications of changing demographics amongst their customers.

Consumers and renewable energy companies also face some legal uncertainty.  Faced with high upfront costs, solar panels are often leased to consumers.  However, most solar contracts only contemplate energy use, not storage.  The question may arise whether the panel owner or the homeowner owns the stored energy.  Panel installation companies will likely need to amend their contracts to account for new battery technology.

Travis Gray

 

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