Is Biden’s Alternative Energy Plan Political Suicide?
“I want you to make his life a living hell … seriously.”
Eric Silagy was fuming.
And he’s not the kind of man you want to make angry.
He’s the CEO of Florida Power & Light (FPL), the state’s largest power utility, which raked in nearly $3 billion in revenue in 2021 alone.
Silagy’s rage was targeted at state Senator José Javier Rodriguez.
The Miami-based senator supported a new clean energy bill that threatened FPL’s bottom line … a bill that would cost the company up to $700 million annually.
For Silagy, the solution was simple.
Get rid of Rodriguez to get rid of his bill.
How is this possible?
Well, it’s not as hard as you might think.
FPL contacted (the now-infamous) political consulting firm Matrix LLC.
Matrix billed FPL $3 million to take care of Rodriguez and his bill, then got to work.
Now, Matrix is a real cloak-and-dagger operation.
Or at least it was.
For years, it operated in the shadows. But a recent feud between the firm’s owners thrust some of its biggest secrets into the light.
As a result, we know exactly what Matrix did to make the state senator’s life “hell”…
To get rid of Rodriguez, Matrix funded a “ghost” candidate with the same last name to run against him. Then it spent a fortune on political ads for its stalking horse.
The spoiler campaign was successful. Matrix’s candidate would later admit he’d been bribed to run, but the damage was already done. The vote was split, and Rodriguez lost.
His new bill was no longer a threat to FPL.
This is more than just a story of corruption though.
It’s proof that today’s utility behemoths feel the threat of a tectonic shift in the future of household power.
That’s why they’re throwing millions at the “problem”…
In 2020, FPL spent $10 million lobbying against solar — more than double what it spent just four years prior.
Through firms like Matrix, FPL has “donated” another $10 million for unethical political campaigns like what it did to oust Rodriguez.
And it’s not alone.
Alabama Power was also connected through Matrix to the North Birmingham bribery scandal that’s since been dubbed “Alabama’s Watergate.”
Even on the national scale, politicians aren’t safe.
President Biden’s Clean Electricity Performance Program (CEPP) has made even him a target. Four of the country’s biggest utilities spent $5.16 million over the last year lobbying against the president.
But these big utilities are fighting a losing battle.
Across America, dozens of utility providers are losing millions:
- Arizona Public Service revealed solar cost its bottom line $80 million annually.
- California’s Pacific Gas and Electric proposed a $120 annual fee across the board — to make up for lost revenue (customers are justifiably furious).
- And the Edison Electric Institute, which represents the nation’s investor-owned utilities, has openly claimed that solar is a “long-term threat to the survival of traditional electricity providers.”
Bottom line: America’s biggest utility companies have had virtual monopolies on how we access power, but that’s about to change … and it’s good news for you and me.
An Overnight Revolution (138 Years in the Making)
The same kind of solar panels that President Carter installed on the White House roof back in 1979 … are suddenly an existential threat to America’s biggest power monopolies.
How is that even possible?
We’ve always been told that “solar is the future.” But for most of our lives, there’s been very little progress.
Even going back to the first solar panels Charles Fritts installed on a New York City rooftop in 1884, not much has changed.
But it’s starting to…
There are three key factors driving this massive surge in solar adoption:
- Solar energy is more affordable than ever. Bloomberg estimates the cost of buying and installing solar panels has dropped 89% since 2010. It’s expected to fall another 34% in the next decade. And by 2050, it will drop another 57%!
- Solar efficiency is rising fast. Conversion efficiency measures the percentage of solar energy converted into usable electricity. In 1992, the University of South Florida fabricated a thin film cell that broke records at 15.89% efficiency. In 2015, SolarCity’s new cells reached 22%. And in April of 2020, National Renewable Energy Laboratory researchers developed a new cell with 47.1% efficiency.
- Solar incentives are appealing for consumers. The government’s 30% investment tax credit (ITC) for solar installations was first enacted in 2006, making home solar installation even more affordable. And there’s no income limit on the ITC either. This tax credit was extended for another decade in March of this year, allowing families to plan installations well in advance. Optional “net metering” practices even allow you to sell excess solar power back to the power company for a credit.
So in a very short time, solar installations became far more affordable, more efficient and tax-incentivized.
What’s crazy about the solar boom is that it’s still in such an early stage.
Right now, solar only accounts for 4% of all U.S. energy production. And about a quarter of that is coming from one state: California.
Yet I can already see the early signs of mass adoption…
Solar Is Starting to Dominate the Competition
Solar power is starting to show up in the kinds of places you’d least expect…
Like on my daughter’s crayon boxes.
They’ve still got the classic Crayola design. But there’s a new banner, proudly proclaiming they were made with solar power:
It’s not just a marketing tactic either.
Cities and municipalities are also going solar in a big way.
Over the last eight years, 15 different cities recorded a tenfold increase in their solar capacity according to Environment America.
The news gets even more amazing when you realize that just nine of those 15 cities now have more solar power installations than the entire United States had 10 years ago.
Even major retailers are turning to solar so they can cut costs and stay competitive.
Target unveiled its first net-zero location in March, with over 3,000 total panels and a solar carport to recharge your EV while you shop.
Check it out:
Walmart claims its solar installations provide 20% to 30% of each location’s electricity needs.
Fact is, the government, corporate America and now consumers like you and me are flocking to solar in droves.
Not surprising, when you get a utility bill that looks like this:
This bill from Lakeland Electric was posted to Reddit.
The user claims his brother-in-law was paying $500 a month prior to installing solar. Now, his Central Florida utility credits him $3 per month.
Getting paid by the power company doesn’t sound too bad, does it?
Especially when you stop to consider all the recent price hikes we’ve seen. Over the last three years alone, prices for utilities and fuel have risen substantially:
These utility prices are likely to keep going up.
Solar Is Becoming More Affordable by the Day
Meanwhile, solar is becoming affordable to the masses.
According to Swanson’s law, solar prices drop every time the volume of modules doubles.
This is a trend that goes back to 1976. In fact, solar prices have plummeted 99.6% in that time frame.
So as adoption rates increase, prices will start to fall faster. Lower prices draw in more consumers … and the cycle repeats, going faster each time around.
The Department of Energy (DOE) estimates that half of all our energy will come from solar by 2050. That’s 1,150% growth from where we are today.
The DOE also expects our solar infrastructure to surge almost 15 times, from 108 gigawatt-hours today to 1,600 gigawatt-hours.
The Solar Energy Industries Association (SEIA) set an even bolder near-term goal, aiming for 20% solar generation by 2030.
Precedence Research believes the solar market will swell to $368 billion by then, from just $197 billion today.
And there’s one crucial innovation that will make this growth possible…
The Key to Mass Adoption Over the Next Decade
As great as all this growth is, the fact remains, there’s a BIG flaw with solar.
Let me explain…
The average American household consumes most of its energy in the morning and evening. That’s when the majority of people are at home. During the day while we’re at work and the kids are at school, our homes are sitting rather idle.
But solar panel efficiency peaks between noon and 3 p.m. local time, when the sun is brightest.
So if you don’t have a way to store or transport the energy generated during these hours, it goes to waste.
On-site power storage in the form of lithium batteries.
This isn’t a new idea.
Tesla’s PowerWall debuted in 2015, popularizing the idea of a home battery system.
But just like in electric vehicles, the cost of these lithium batteries has been prohibitive for most hard-working Americans.
The good news is, battery prices have plunged 90% since then. And it’s all thanks to advances in technology and manufacturing.
By 2030, cost is expected to decline another 50%.
Nearly a quarter of all home solar installations are now being paired with battery storage solutions.
Statista says the global residential storage market will reach $26.4 billion by 2027 (up from just $5 billion two years ago).
Bloomberg estimates lithium-ion battery usage will grow at a 50% clip for the next five years, as more new solar installations begin using on-site storage. Over the next decade, it expects $262 billion in new investments for industrial energy storage.
According to this Bloomberg report:
The global storage market is growing at an unprecedented pace. Falling battery costs and surging renewables penetration make energy storage a compelling flexible resource in many power systems. Energy storage projects are growing in scale, increasing in dispatch duration and are increasingly paired with renewables.
Supercharging a Energy Revolution
Affordable energy storage is key to unleashing the true potential of solar power.
With on-site storage, you can finally unplug from utility companies and circumvent rising rates.
You won’t have to wait days for utilities to come back online after storms, hurricanes or blizzards either.
For anyone plugged into the grid, this is going to be revolutionary.
For investors, it’s the chance to make a killing.
And some of the biggest winners of this revolution will be from the up-and-coming power storage industry.
Because as solar energy production rises almost tenfold over the coming decades, projections show battery storage skyrocketing more than 25,833%.
Through 2030, Bloomberg expects a compound annual growth rate of 30%.
It’s a great time to be a part of this market.
If you’d like to know more about one of my favorite renewable energy investments, just click here.
But what do you think?
Have you thought about going solar, either for your home or business?
What about an on-site battery or EV charging station?
Like I said, we’re at a fascinating moment in the solar adoption curve…
You may see solar panels every time you go out driving. My publisher, Larry, can’t get the solar salesmen to leave him alone!
I’d love to hear what you think about solar power — and about solar investing!
Write in to WinningInvestorDaily@BanyanHill.com.
Editor, Strategic Fortunes
My career on Wall Street started while I was in college. I spent a summer interning for Merrill Lynch in the middle of the ‘90s bull market. I was fascinated with trading, and as a result, after college, I joined Salomon Brothers in the famed mortgage bond trading department. Later, I spent time at Citigroup working with credit derivatives. Eventually, I needed to walk away from the excess of Wall Street. That’s when I joined Banyan Hill in 2017. Now I help readers get ahead of the market and build their retirements.