The Problem with the monopoly of energy companies

We’re used to having choices. Lots of choices.

You can choose your internet, cable, and phone provider. Then, once you’re satisfied with your provider, you can choose from a plethora of computer, television, and phone brands that fit your budget and suite your preferences. Head to the grocery store and you’ll find over 150 brands of cereal, more than 200 different types of sodas and drinks, over 300 different types of candies, chocolates, and sweets, and around 50,000 products, packing the shelves of the aisles you walk down.

We have, and have always had, a freedom to choose.  

While there are certain drawbacks of having so many choices, there are also undeniable benefits that we enjoy as consumers within this competitive, free market:  

-Brands must create quality products in order to stand out in their specific market.

-Brands must also prioritize and push for innovation in order to gain an edge or advantage over their competition.

-Pricing must be competitive and fair

-Efficiency of process, production, and delivery is required so brands can continue cash flowing

-New brands and entrepreneurs can enter the market with paradigm-shifting ideas or products, which pushes progress and quality forward

-Free markets encourage diversity and specialization, allowing businesses to cater to niche markets and specific consumer preferences.

This diversity of offerings ensures that consumers with varied tastes, preferences, and budgets can find products and services that meet their needs.

Many of the luxuries we enjoy today can be attributed to our market’s approach.

However, there is one question that begs to be asked: with all of the progress and freedom our free market has created, why can’t we choose our electrical company yet?

Power has been monopolized. Most individuals only have one power provider to choose from and that’s it. There are a handful of states that give you the option between two power companies, but those are the exception rather than the rule.

There are some major, glaring problems with this monopolistic approach, and we want to discuss them here, and maybe give a glimpse of hope into a future where innovation and invention changes the power landscape.

PROBLEM 1 - LACK OF COMPETITION MEANS ARBITRARY PRICING (AND PRICE INCREASE)

Over the last few decades, power prices have only gone up. Most homeowners experience an 8% hike in power prices year to year.

Monopolies have the power to dictate price without fear of competitors undercutting them. In the energy sector especially, this can result in artificially inflated prices and more expensive energy over the longterm.

PROBLEM 2 - MONOPOLIES AND INNOVATION NEVER MIX

Without competition, monopolies have little incentive to innovate or improve the quality of their services or the efficiency of their power creation.

This can also lead to outdated infrastructure, technology, and ineffective processes. This small problem often leads to bigger issues:

-Environmental impact is often negative and broad because cleaner methods have not been engineered or “needed”

-Inefficiencies can lead to slimmer margins, causing price hikes and inflation.

PROBLEM 3 - POLITICAL INFLUENCE

Energy monopolies often wield significant political influence. This can undermine regulatory oversight and lead to policies that favor the interests of the monopoly over those of consumers or the environment. As a result, regulatory agencies may be less inclined to enforce antitrust laws or implement measures to promote competition and consumer welfare

SO, WHAT’S THE FIX?

One, long-term fix would have to come from the private sector. An innovation-focused company that creates a more efficient means of creating and distributing power. Though this disruption seems like more of a long shot with more barriers of entry and more pushback by agencies and departments, it would fix our monopoly problem.

And this brings us to the central point of our article: the importance of solar. While solar isn’t the only fix, it certainly is the most simple, practical, and functional. Putting solar on your roof allows you to “break up” with your energy provider, while simultaneously giving you the power to flatline your power bill, choose another source of energy creation, and subscribe to another energies company.

Solar, as its adoption and acceptance grows, becomes the David to stand up to the energy-monopoly Goliath. As more individuals opt to go solar, these energy providers begin feeling a pressure to change their approach, make their energy production more efficient, and be more careful with price adjustments and hikes.

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