read the following article: http://www.bloomberg.com/features/2016-solar-power-b

Question

read the following article:

http://www.bloomberg.com/features/2016-solar-power-buffett-vs-musk/ (Links to an external site.)

Please answer one of the following questions:

1. Is rooftop solar power competing with electric utilities? Does the market for electric power work like a normal competitive market?

2. What is the role of the government in regulating the electric power market? How should it weigh the interests of customers with rooftop solar?

3. Is the viability of rooftop solar and companies like SolarCity entirely due to subsidies? Are utilities like NV Energy providing unbiased economic arguments?

4. Why do utilities prefer to do deals with concentrated solar farms?

5. How could the electric power market be restructured so that companies like SolarCity and NV Energy could compete openly and fairly?

Explanation / Answer

1. The rooftop solar power is competeing the electric utilities as it utilities will not be able to sell required units of energy and has to increase what it charges for electricity to ensure that it can still cover its fixed costs, such as grid maintenance and labor. As energy prices go up, it will again push the people toward renewable energy alternatives.The market of electric power is not as normal compettive market as the utilities can't reduce the energy prices to increase the demand,they may have to switch over to new alternatives.

2. The government provides subsidies and enables an arrangement called net metering, which allows homeowners with panels to sell back to the grid any solar energy they don’t use. The governer has also tried to avoid favoritism—and, at times, has promoted policies that helped the solar industry. The government can attract the customer by providing them solar rooftop panels at lower prices and effective metering policies.

3.Definetly, the rooftop solar companies are viable entirely due to subsidies as the customer look out for the economical solution. Thegovernment plays a vital role in helping the customer so that they can get cheaper electricity as compared with the existing utilities.The economic arguments totally prove that the energy bills are reduced and they even helped the demand of existing utilities.The NV energy is right on thier part as more will be the solar installations more it will be the cheaper.

4.The utilities prefer to do deals with concentrated solar farms as it  can generate enough power for about 70,000 homes making it a major player of the utility-scale solar market.The concentrated solar power plants generate power best during the late afternoon – during peak demand – and can therefore potentially displace the use of fossil fuel plants that emit the greenhouse gases that cause climate change.The concentrated solar power production have been shown to create more permanent jobs and stimulate the economy as compared to its natural gas counterparts. concentrated solar power can be integrated fairly easily into today’s electric utility grid. This also makes concentrated solar power technology the most cost-effective solar option for large-scale electricity generation.

5.The problem for utilities is that more people produce their own electricity through solar, the fewer are left being billed for the transmission lines, substations and computer systems that make up the grid.A common solution is required.A solar policy can be made in which customers have to pay minimum bill which compensates the fixed cost of the power utilities.The cloudy days will create better revenue for the power utilities but in summer some fixed cost or policies must be applied to the customers. The government can also provide subsidies for the losses in transmission substation and fixed costs of the thermal utilities.

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