by John Berger
Amid a polarizing presidential election, areas of common ground are rare, especially around energy. President Joe Biden has labeled climate change as “the only existential threat humanity faces,” and outlined an agenda to reach net-zero carbon emissions by 2050. Meanwhile, his would-be Republican challengers have pledged a different course, with the frontrunning campaign of former President Donald Trump pledging to “maximize fossil fuel production” and roll back funding for Biden’s landmark 2022 Inflation Reduction Act.
A step back from the daily partisan back-and-forth reveals an idea with something for everyone to support: increasing choice when it comes to where consumers get their energy. A commitment to freedom and creating our own destinies is quintessentially American. Yet most of our citizens have zero control over their power provider and the cost of their energy, and very few politicians on either side of the aisle say anything about it.
Here’s the problem: the U.S. power system is built upon century-old energy infrastructure, leaving it perennially dependent on an outdated system of subsidies and monopolies. The long-standing utility monopoly model is a relic from a time when it was deemed a social good to have one entity control the generation and distribution of power. Times have changed, but the system has not.
Innovation has made solar, batteries, smart generator sets, artificial intelligence, and software increasingly available to power service directly to homes and businesses. Yet our current power system’s monopolistic ecosystem continues to thwart price signaling, technological improvements, consumer choices, and technological advancements along with cost savings for consumers.
The legacy regulatory model of monopoly utilities is forcing consumers to pay for the privilege of having fewer options and dirtier power. If you want something overpriced and undersupplied, make it a monopoly. Big utilities are taking advantage of their captive customers, engaging in anti-free market tactics to protect their monopolies and buy influence. The result is higher prices, unhappier customers and limits on energy growth, including growth from renewable sources.
Whether they are red or blue voters, energy consumers are craving more sustainable and reliable options with better customer service—and at lower costs. Polling data shows three out of four voters want the power to choose their energy supplier, a goal that can only be achieved via competition in the power industry.
Retail electricity rates across the country have increased by 27% over the last decade. As many Americans struggle to pay their electricity bills, utilities continue to request rate increases that are being used to pay their shareholders and subsidize political advocacy to keep the status quo energy system in place.
Instead of centralized resources and control, the U.S. power industry should have an integrated system consisting of a hybrid of centralized and decentralized assets. The result would be a more durable, more reliable, and more decarbonized power system personalized to the consumers it serves.
The restructuring of the U.S. power industry can be a rare bipartisan area of agreement. It would advance progressive priorities of addressing climate change – deemed a “critical threat” by 82% of Democrats – while unleashing competition and free-market capitalism long championed by Republicans. Both sides of the aisle can take political credit for the lower prices, energy security, and innovation that competition will bring.
Rather than being propped up by government subsidies or mandates, renewables should be allowed to grow organically and in response to consumer demand. If they are more reliable and less expensive, customer demand will increase. Replacing government mandates with free-market competition will deny critics of green energy one of their most persistent and frequent arguments.
An environment where full competition in the marketplace drives costs down, encourages innovation and diversification of services, and gives consumers meaningful decision-making power over their energy consumption, would be challenging for any conservative policymaker to oppose.
Rather than pitting renewable energy against fossil fuels, let’s focus on consumer choice versus continued protection of the status quo monopoly power companies. It’s not only a rare opportunity for bipartisan progress but would have something for everything to like: more market-based competition and innovation, with a cleaner and more secure energy future.
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John Berger is the CEO of Sunnova Energy International Inc., a Houston-based adaptive energy services company.
