The U.S. Energy Information Administration (EIA) released its monthly report on October 6 and not surprisingly, the COVID-19 pandemic has taken its toll. Electricity consumption in 2020 is predicted to the 2.2% less than last year. One area where electricity consumption is expected to rise is in Americans’ homes. I guess that’s to be expected when the country is on lock down and we’re cooking more, using our devices more and streaming more Netflix than ever before.
What’s worth noting for you renewable energy fans out there is that the big three green power sources—wind, hydropower and solar—continue to make gains, with solar right behind wind in U.S. energy consumption.
I’ve gone through the EIA’s report and here are the main takeaways I’d like to share with you:
EIA forecasts 2.2% less electricity consumption in the United States in 2020 compared with 2019. EIA expects retail sales of electricity to fall by 6.2% this year in the commercial sector and by 5.6% in the industrial sector. EIA forecasts residential sector retail sales will increase by 3.2% in 2020. Milder winter temperatures earlier in the year led to lower consumption for space heating, offset by increased summer cooling demand and increased electricity use by more people working and attending classes from home.
In 2021, EIA forecasts total U.S. electricity consumption will remain flat and on par with 2020 consumption. The forecast for electricity consumption in the first quarter of 2021 is higher due to an increase in demand for space heating. However, this will be offset by lower forecast electricity consumption in the third quarter of 2021 because of less cooling demand based on NOAA forecast of fewer cooling degree days. So get ready for a cold winter and cooler summer next year!
EIA expects the share of U.S. electric power sector generation from natural gas-fired power plants will increase from 37% in 2019 to 39% this year. What’s interesting is that the EIA experts predict demand for natural gas will decline to 34% due to higher natural gas prices. Coal’s forecast share of electricity generation falls from 24% in 2019 to 20% in 2020 but jumps back up to 24% in 2021. Go figure!
Electricity generation from renewable energy sources such as solar will rise from 17% in 2019 to 20% in 2020 and to 22% in 2021. That’s a trend I like to see! The increase in renewables’ share of electricity generation is the result of planned additions to wind and solar generating capacity. And yes, Solential had a hand in that! The EIA expects 3% declines in nuclear generation in both 2020 and 2021, reflecting recent and planned retirements of nuclear generating capacity. The nuclear share of U.S. generation remains flat at 20% in all years.
In 2020, EIA expects U.S. residential electricity prices to average 13.1 cents per kilowatt hour, which would be 0.4% higher than the average electricity price in 2019. The increase is nominal so should be absorbed without too much difficulty. Annual changes in regional residential electricity prices range from 1.4% lower prices in the South Atlantic region to 4% higher prices in the Pacific region. Low electricity costs are always welcome.
I’ve saved the best for last: the EIA forecasts that renewable energy will be the fastest-growing source of electricity generation in 2020. EIA expects the U.S. electric power sector will add 23.3 gigawatts (GW) of new wind capacity in 2020 and 7.3 GW of new capacity in 2021. Expected utility-scale solar capacity rises by 13.7 GW in 2020 and by 11.8 GW in 2021. It’s worth noting that consumption of solar will go from 1.043 in 2019 to 1.277 in 2020 to 1.596 in 2021 as measured in quadrillion Btu’s.
O.K., that’s data point was a bit abstract for most of us, but what is says is Americans are consuming more solar energy. And that’s across commercial, industrial and residential sectors. What we see driving demand at Solential are four key things:
- A growing desire to transition to renewable energy sources to reduce one’s carbon footprint.
- Better solar panel and battery technology which has not only made solar generation more reliable, but also more affordable.
- Lower, less volatile electricity costs that give everyone from schools to water treatment facilities, businesses to farms, prisons to non-profits savings that can be re-invested elsewhere.
- More financing options that can remove the upfront costs of installing a solar system.
- The opportunity to lead by example by going green!
The best news of all? According to my prognostications, America will recover from COVID-19 and electricity consumption will grow, too. Let’s make sure; however, that the growth comes in the solar industry! If you have any questions regarding commercial solar for your business, municipal government, school, water treatment facility, hospital, farm or even prison, just give me a shout. I have a lot of information to share with you. Email email@example.com or call or text 317.627.4530.