Economics of electricity pricing and consumer protection

Abstract

Consumer protection and electricity pricing issues that emerge when consumers generate their own electric power by installing solar photovoltaic (PV) panels (known as solar distributed generation, or DG) nowadays are in the centre of interest of public administration and citizens as far as it concerns energy supplies of households and new inter-relations which occur as the result of technological advance. Despite the fact that the output of a solar panel cannot be precisely predicted, the marginal cost of generating electricity from the renewable energy sources is nearly zero. This made renewable sources with the inclusion of solar panels the first choice for utility firm in fulfilling its customer's energy demand. We look into the economics of electricity pricing and issue of consumer protection associated with the distributed generation in the developed economies by the example of the USA. Our results might help the stakeholders and policy-makers as well as energy companies to obtain a deeper insight on this problematique. Given that the United States are dangerously affected by climate change, the use of solar renewable energy would be of great benefit in controlling the environmental hazards caused by the use of non-renewable energy on the environment. The government and other socially influential stakeholders must initiate and further participate in the public awareness campaign concerning policies, the concept of net metering and the pricing of solar products. Copyright © Institute of Society Transformation, 1998-2017.