How smart grid technology can affect energy prices

Smart Grid technology can affect energy prices in two ways: increase tariffs for high demand peak periods and reduce them during unusual time. The benefits of Smart Grid can run with both ways: for those who use smart grids and create all their own energy, selling excess energy back to the grid to be a decent choice. Excess energy can then be credited to the consumer account for that month.

More and more people become familiar with the concept of alternative energy forms and are willing to install and use this system in their homes, the utility company will require less energy. Instead of losing money, they can start changing the way they charge. This can be done by moving from a flat rate system to charge the actual use. The smart system that really costs more for high demand periods will create smarter consumers because they work to keep their energy costs low. The utility company will continue to get profit and consumers will control their own consumption.

When more people are connected to a photovoltaic system for example, the energy costs created by the utility company will go down; Less production is equal to costs less, except for customers not using solar power at all. The customer then must make a conscious and clear decision about when and how they use energy in their homes or pay a higher bill. PV users will then see cost reduction and perhaps credit at the end of each month. In fact, it is fully possible for the right system to start paying for themselves in just eight years, depending on a number of factors.

More and more people sell their excess energy back to the grid, the less energy the company utility must produce itself. If enough people sell excess energy back, utility companies become a giant retaining facility to compensate for solar power, allowing prices to be dropped further. However what is charged for almost pure profits if most of the energy sent is being made and returned to the grid by someone else.

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