The PV solar power industry and online music service Napster have a lot in common: Both took on a sacred cow and changed our world in a profound way.
Industry experts have observed that recent changes in the music recording industry are amazingly similar to the inevitable changes that utility companies face, thanks to the rapidly expanding solar energy industry. The power companies are being forced to adapt to solar energy, just as the music industry had to adapt to the use of online music services.
Traditional Industry Models
The conventional utility industry, prior to the widespread adoption of photovoltaic power, had a monopoly on providing power. Not so long ago, everyone who needed electricity was forced to rely upon the power companies.
Electricity rates were based on demand, but also on the amount of profit the companies could command. Because municipal and private power providers have held a monopoly for almost a century, customers were at their mercy, subject to exorbitant and continuous rate hikes.
The traditional music industry mirrored this very model.
Anyone who wanted music was forced to purchase an artist’s records or CDs (or record their favorite songs from the radio). Record labels controlled industry pricing, banking the profits while restricting musical artists with exclusive, long-term contracts.
Customers paid whatever the industry demanded, because that was the only way to hear the music they loved on demand.
Impact of Napster
Then, at the end of the 20th century, Napster came along and changed everything.
Artists began creating their own recordings and filming their own music videos. Napster offered customers another way to access music, without the $19.99 price tag consumers had been forced to pay for a single album.
The record companies were, of course, not at all happy with this development. In fact, they claimed that music costs would actually go up as a result of this new business model.
But — surprise! — that never came to pass. In fact, the cost of music has come down significantly. Today, you can now have unlimited access to all the music you want for less than $10 per month through online and streaming music services.
And, of course, the music industry is still making money; executives simply had to think outside of the old paradigm and modify their business models to adapt.
Effect of PV Solar on New Industry Models
PV solar energy has had an eerily similar impact on the utility industry.
As more people across the country come to rely on photovoltaic power for part or all of their electricity needs, the power companies are working overtime to think of ways to make up for the loss in profits. They’re jacking up rates, supposedly to compensate for the infrastructure costs that PV solar customers often do not pay.
Currently, net metering laws require utility companies to pay for excess electricity generated by customers’ solar panel systems. Some utility companies have attempted to decrease the rates they pay customers for net metering and to enact surcharges exclusively for solar customers. In many cases, the power companies are not succeeding in their fight, and the pressure is mounting.
Just as the record companies had to change how they make money, the utility companies must find new methods to maintain their profit margins, rather than doing so at the expense of solar customers.
At Intermountain Wind & Solar, we applaud the changes that Napster and other trailblazing enterprises forced on the establishment. If you’re ready to assert your own energy independence, contact us today. We can explain exactly how financially beneficial PV solar power can be for your home or business.