A shortage of oil can cause energy prices to rise worldwide, including the cost of electricity flowing through the grid.
Crises that affect the availability and cost of fossil fuels are likely to continue and even intensify.
Still, you can take steps to insulate yourself from an oil shortage.
Here are seven benefits of switching your home to solar power when oil supplies are unpredictable and high prices.
1. Minimize the Pain of Oil Shortage Price Spikes
The prices of gas and power rise during oil shortages.
Most electricity in the United States still comes from natural gas, coal, and nuclear sources.
Renewable energy sources accounted for just 20% of electricity generation in 2021, an annual share that is forecasted to rise to 24% by 2023.
If your household depends on the grid to meet most or all of your energy needs, you’re more likely to feel the effects of an oil shortage than you would be in a home powered by alternative energy, such as a grid-tie or off-grid solar power system.
A grid-tie system enables you to meet your family’s power needs and only draw from the grid when necessary.
A home solar energy system that connects to the grid may be eligible for local net metering programs.
These billing programs offer credits to account holders for contributing electricity to the grid.
With net metering, you can limit your dependence on the grid and offset at least some of the cost of drawing power during an oil shortage.
Be sure to check if your utility provider allows net metering.
A residential solar power system tied to the grid can also work with battery storage as a backup in an outage.
If you choose an off-grid solar power system for your home, oil shortages cannot directly affect your energy costs.
This approach calls for the most significant investment in solar panels and battery storage.
However, it eliminates your connection to a grid that is still dependent on fossil fuels for around 80% of annual electricity generation nationwide.
You may have access to state or federal incentives that reduce the cost of switching to solar.
2. Have Plenty of Power When Fossil Fuels Are in Short Supply
Meeting your home energy needs with clean, renewable energy is one way to reduce personal Usage during an oil shortage.
Reduced demand on the grid can stem from more homeowners and commercial property owners investing in solar energy.
Oil shortages typically result in fuel conservation.
The International Energy Agency recommends 10 intermediate steps to combat a shortage, including:
- Reducing speed limits
- Working from home three days a week
- Flying less, saving 2.7 million barrels of oil per day
Even if you have a grid-tie or off-grid solar power system, you may want to take these steps if you drive a gasoline or hybrid vehicle.
Gasoline and petroleum products still accounted for about 90% of the total US transportation sector energy use as of 2020.
A sense of scale is essential when considering the impact of solar power during an oil shortage.
The residential energy-use sector consumed 6.54 quadrillion British thermal units, and the commercial sector consumed 4.32 quads in 2020.
In the same year, only 12% of the total US energy production came from renewable sources, while 36% came from natural gas and 32% from other petroleum products.
Although home and utility-scale renewable energy installations account for the smallest portion of energy production, this share should rise rapidly over the coming decades.
3. Rely on Battery Systems During Power Outages
If you invest in a battery system, you can have peace of mind that your home solar power system will work during brownouts or blackouts.
While it is possible to have a grid-tie system without battery backup, storing power and using it when you need it can be helpful when the sun isn’t out or the grid goes down.
While it is rare for an oil shortage to cause power outages directly, a battery backup is an excellent thing to have regardless of global energy market trends.
Solar batteries contribute to the total cost of a home installation but can prove invaluable in the event of an extended outage.
Battery storage helps ensure that you can cover your home energy needs under both ordinary and extraordinary circumstances.
Battery systems can keep your lights on, appliances running, and devices charging after the sun goes down.
A battery must recharge to keep operating for prolonged periods.
You should calculate your energy needs to determine how much battery storage to include in a system.
4. Reduce or Eliminate Reliance on the Electrical Grid
A home with a grid-tie solar power system relies on the power grid based on panel generation capacities and electricity needs.
Drawing less energy from a grid that relies heavily on fossil fuel sources, such as natural gas and petroleum, can cut expenses and Usage during an oil shortage.
Even when oil flows and fuel and energy prices are more affordable, solar energy lowers ongoing usage costs.
The US surpassed 2 million solar panel installations in 2019.
By 2024, it’s projected that 2.5% of American homes will have solar installations.
This rapid increase is likely to continue over the next decade, driven by oil shortage pressures.
If you no longer want to rely on the grid for power, you will need to invest in an off-grid solar home energy system.
These systems include:
- Energy storage batteries
- Other equipment to power your home independently of any power grid operating in your area
These installations require the most equipment and significant up-front investment for total energy independence.
5. Offset Usage on a Grid-Tie System with Metering
Being able to rely on the grid can provide peace of mind that you have access to power.
If the cost of an off-grid system is a deterrent, a grid-tie system can reduce your costs by reducing the number of needed panels and eliminating batteries.
Depending on where you live, you may also have the option to participate in a net metering program with your utility provider.
Net metering allows certain solar customers to send between 20% and 40% of their solar system output to the grid and earn credits for the power they draw at night or when their household use exceeds their solar energy system output.
You can lower your electric bill even during an oil shortage by selling excess power when it is available.
At least 17 states have authorized net metering.
If you live in a state without net metering, you still have the option to set up a grid-tie system with battery backup.
Off-grid systems are not connected to the utility power grid, and therefore, these systems cannot draw power if their batteries run out of charge or their solar system malfunctions.
Total independence from fossil fuels comes with not having an established utility to fall back on if you need more power.
6. Charge an Electric Car and Devices
You can reduce your reliance on oil substantially by driving an electric vehicle that you charge with renewable power generated by your home solar energy system.
For decades, Americans had few options other than to connect to dirty power grids and drive gas-powered vehicles.
Although electricity from the grid and these cars tend to cost less than a home solar power system and electric cars, both operating costs fluctuate during an oil shortage.
If you want to reduce your dependence on oil, you should prepare to make some significant investments upfront.
The average price for an electric vehicle is about $10,000 higher than the overall industry average.
Residential solar power installation costs vary based on whether you select a:
- Combined grid-tie and energy storage
- Off-grid solar installation
The cost of solar panels and equipment has dropped as capacity has increased.
Electric vehicles are also becoming more affordable.
As residential solar power systems and electric vehicles become popular, the prices are likely to decrease.
Investing in home electricity and transportation solutions to insulate from oil shortages can be an intelligent decision in the short and long run.
7. Have an Independent and Renewable Power Source
The ability to generate your own electricity, let alone store excess power to use later, is a relatively recent development.
Although residential solar installations began in the US during the 1980s, the ability to meet the needs of a modern residence at a price justified by energy savings is a relatively recent development.
An entirely off-grid system will cost considerably more than a grid-tie system due to the need for more battery storage.
This cost can be worth it if you want to power a residence located in an area without utility service or if you are seeking independence from the grid.
Off-grid systems do not include options for net-metering or drawing power from the grid if panels aren’t generating energy and no backup battery power is available.
If you want to take measures to reduce the effects of a global oil shortage on your budget, selecting either a grid-tie or off-grid solar system is one of the most intelligent choices you can make.
Driving an electric vehicle or working from home more days a week if you drive a hybrid or gas-powered car can also help to reduce your oil consumption.
It is worth noting that any appliances or features in your home that run on natural gas will be vulnerable to price increases during oil shortages.
Why Switch to Solar During an Oil Shortage?
The cost of solar energy technology has dropped significantly over time.
Each doubling of solar capacity since 1976 has led to an average 20.2% decline in solar panel price.
According to data from Lazard’s Levelized Cost of Energy Analysis, the cost of solar equipment has dropped more than 90% over the last decade.
As a result, onshore utility-scale solar has become the cheapest energy source to build and operate.
Homeowners have also seen a decline in the cost of residential solar power systems.
Energy futures fluctuate wildly during an oil shortage, but consumer costs tend to rise.
Investing in a renewable energy solution is best to protect your family.
Although solar energy equipment involves a considerable upfront investment, reducing utility costs and federal and state tax credits and other benefits can pay off over the years.
Unbound Solar helps customers attain energy independence, from grid-tie systems (with or without net metering) to off-grid installations.
Solar power can:
- Reduce the Usage of energy from fossil fuels
- Shrink your carbon footprint
- Provide insulation from unpredictable energy prices during an oil shortage
Find out more about how solar energy can benefit you by contacting us today for a quote!