Where Energy Comes From & Why Residential Solar Just Makes Sense?

published on 05 October 2022
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“Learning never exhausts the mind.”

Leonardo da Vinci

We flip on a light switch and instantly receive the benefits of electricity, but few people fully understand how that power makes it to our homes and how fragile that system truly is. Ask anyone living in Texas and they can recall when the system broke for weeks, leaving hundreds dead because of a power grid failure that left 4.5 million homes and businesses without energy or water. Moments like that are enough to cause anyone to worry about the future and what we can do to protect those we love.

The Current State of Energy in the US

In the United States, the electric grid comprises an extensive network of independently owned and operated power plants and transmission lines. They created this system for supplying power from the point of generation to the homes, offices and businesses that depend on it to function often hundreds of miles away. They generate power in a variety of ways, but the common denominator is that it all still flows through the grid.

There are three main power grids in the U.S. and they are:

• The Eastern Interconnect

• The Western Interconnect

• The Texas Interconnect

Yes, Texas has its own grid and in 2021, when it suffered several large winter storms during the month of February, that grid collapsed. As for the Eastern and Western grids, you find that those actually reach deep into Canada, helping to power the vast majority of our northern neighbor as well. 

Where That Energy Comes From

With energy production, the term “How the Sausage is Made” comes to mind. Most of the energy produced in North America comes from what we would consider dirty energy (coal, oil, gas, etc.). And while I have nothing against those industries or the people that work in them, much of the legislation and infrastructure surrounding them is based upon supporting the industry versus supporting the people. 

Of the various forms of “dirty energy”, coal is far and away the worst health wise for human, animals and the planet alike. In fact, the town of Evansville, Indiana, is within 30 miles of seven coal-fired power plants. These plants contribute to thick air pollution known to locals as “The Evansville Crud”. Which is reported to leave a thick layer of particulates on everything from cars parked outside to children’s swing sets. 

The reason coal is especially egregious to health and air quality is because it is a messy, inefficient system. When people think about pollution, they often think about the large smokestacks spewing toxins into the air, but it’s actually much more than that. The extraction of coal itself, the machinery to dig it up and place it in trains and trucks, the transportation of it, and the long journey it has before becoming energy. Here is the process:

• They extract coal from the earth.

• It’s placed in a bunker for storage, then sent to a pulverizing mill

• Then several steps (bag filter, storage tank, feed tank, distributor) all with the potential for pollution before it even hits the blast furnace to generate the actual power and most of the air pollution associated with it. 

Contrast that with cities like Honolulu which leads the United States in per capita solar power and as a result has one of the highest air qualities in the U.S. Solar is not the only clean renewable energy source, but from a power perspective it is one of the best options. Other cleaner energy sources are wind, nuclear, and clean hydroelectric, which are all being built around the world at a rapid pace. 

The U.S. relied on these dirty forms of energy to power our growth, as many developing countries do today. Luckily, technology has caught up to industry and clean energy is now as cheap to produce as dirty energy. That is why, according to the federal government, in 2021, wind and solar supply 70 percent of the new power plant capacity being built. In addition, almost every new U.S. power plant of 2021 will be a carbon-free facility. This is great news as it means we are heading in the right direction to reduce pollution and our negative impact on the planet while also producing good paying jobs here at home. 

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How is Electricity Delivered?

Now that we know where the energy comes from, how does it make it the hundreds of miles to our homes every day?

1. Power planet generates the electricity

2. Power flows to the transformer where it then steps up voltage for transmission

3. Power flows on transmission lines long distances until reaching neighborhood transformer

4. The neighborhood transformer steps down the voltage so we can use it in our homes

5. Distribution lines carry the electricity to our houses

6. Local transformers on poles further step down the electricity as it prepares to enter our home

7. You can now flick on the light switch and see the energy in action

So, as you can see, this is a multi-step process which results in energy traveling hundreds and sometimes thousands of miles from its point of origin at the power plant. That inefficiency also results in power loss along the way. Energy’s lost as heat while it travels on the transmission lines. When you are traveling, you can get an idea of the amount of heat being lost on these lines by the amount that they droop and sag. The heat causes them to expand over time and so when you see lines hanging especially low, that means they are very hot and very inefficient. Typically, the amount of energy lost from the power plant until your home is about 5%. 

What’s more is that if 5% energy loss doesn’t sound like much, consider the fact that only about 1/3 of the potential energy from a lump of coal, oil or nuclear even makes it onto the grid as energy. To put that in perspective, the amount of energy we lose because of thermodynamics is more than the annual gasoline consumption in the U.S. 

Last, once the energy makes it to our home, it doesn’t stop there. Energy travels to our appliances and if they are not energy efficient, we are likely to see further energy loss, of which we are now responsible for footing the bill. Because once the power hits our home, the power company is no longer responsible for losses, we are. Next chapter, we’ll discuss ways to help reduce the power consumed at home.

The True Expense of Energy Production

Energy production at scale has efficiency issues that small production at home simply does not. It’s no wonder people can reduce their monthly utility burden by switching to renewable energy. Let’s look at the costs of energy production at a typical power plant. 

First, we have significant generation expenses to account for. These are things like paying workers to extracting the coal or oil, then paying to ship the physical product long distances, and finally a series of workers, managers, and executives are all paid to help keep the energy flowing.

Next, we must factor in losses from the wasted energy because of thermodynamics and the production of energy, which can account for almost 70%. Yep, that’s almost 70% of the potential energy literally going up in smoke all before it even reaches your home. Then there is the loss of energy from your home to the very appliances you require, the energy to power. In addition, our electric bills also must factor in paying for people to maintain the poles, transformers and lines that deliver the power. These are skilled employees who get paid well and guess what? When a storm comes and the power goes out, they get paid even better to risk their safety to fix it.

Last, is the environmental costs of traditional energy production. That includes the damage done extracting the energy from the ground as oil or coal. Disposing of the waste which can be extremely dangerous and hazardous, especially if we include nuclear energy waste in the discussion. The pollution in the air during production and sometimes long after. And finally, the pollution that results from long since abandoned factories that no longer have a use and sit vacant as a blight on the land. No matter how you slice it, traditional energy production is an expensive, wasteful process.

Why Solar Is a Better Alternative?

Much like the food production was better when done at a smaller scale at a local level, energy production is also better at the small scale too. In the past, every town had several farms delivering food locally and rotating the crops to ensure the land was productive for the next generation. Late last century, they dumped the process of crop rotation in favor of single crop production, leading to higher yields now at the expense of future production and biodiversity. Energy production has grown much the same with large energy production facilities producing huge amounts of power, but suffering from waste and loss as it travels far distances to our homes. In addition, we generate that power at the expense of future generations. It was one thing to do that when we didn’t have realistic alternatives, but now we know what the damage is and we also have alternative clean energy sources at similar financial cost, producing a negligible environmental cost.

If we charged energy companies based on their true cost, i.e., the damage to the atmosphere, the soil, or even the damage to the enjoyment of a beautiful view, it would make the choice not really much of a choice at all. 

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Here are the 18 best reasons that solar makes sense for your finances and your families future

Solar is Cheap

Yep, you heard me right, solar power is a cheap source of electricity to power your home. Assuming you have the right roof and you don’t live in the middle of a forest, solar has the potential to offset over 100% of the electricity you use every single year. In fact, you can often receive credits from the electric company for excess energy that you produce. 

Over the past decade the price of solar panels has dropped about 70% as they have become more widely adopted and efficient. Presently, the chief obstacle to a lower price are the materials needed to produce them and as more people switch to solar, the price may actually climb. While a typical system here in the US costs anywhere from $10,000 to $40,000 depending on energy needs and the efficiency of your particular roof, financing has turned that into a cheap monthly expense that can be less than you were paying on your electric bill. What’s more is that just like your house, once you’ve paid off the panels you own them free and clear and any energy they produce is almost FREE. 

Besides a drop in the price of solar panels, several states offer tax credits to help further entice homeowners to make the switch. These tax credits will not last forever, but while they are here, we encourage everyone to take advantage of the potential savings they can create. As the US pushes everyone towards green energy and electric cars, early adopters will be rewarded, and those that wait will be required. It’s fairly obvious that US citizens are being strongly encouraged to make the switch to cleaner energy. I would rather see you get rewarded for early adoption with tax credits and savings than punished with higher prices as costs rise due to increase demand and new regulatory requirements.

Buy Your Energy, Don't Rent it

One point many people don’t realize is that essentially when you switch to solar, you switch from renting your energy to buying it. When getting your energy through traditional energy companies, that monthly payment you make each month goes to pay off their aging infrastructure. With solar, that payment you make each month goes to pay off YOUR infrastructure. You have become your own power plant, and that’s an amazing feeling. You are paying either way. Why not get something for your money? To me, this is the most no brainer decision you could make with your money.

More Control Over Your Bill

Another important reason to switch to solar is to stabilize and control your monthly energy costs. If you could have locked in your gas prices at $2.00 a decade ago and know that in another few years, your yearly gas price would be next to free, would you have done it? Switching to solar locks in the rate you pay now, saving you substantial money when the price of electric goes up in the future. You’ll no longer be shocked by large monthly energy increases. You can have a predictable monthly investment in your home that won’t change. An investment that does not cost more each month and that will not throw unexpected curveballs to your household budget. For me, I hate surprises (just ask my friends the last time they threw me a surprise party) I enjoy setting an expectation and having it met without dealing with the unexpected. Basically, financing a solar project allows me to have a set monthly payment that does not change or surprise me. 

Increases the Value of Your Home

If you were moving to a new house tomorrow, would you want one with solar panels and a low monthly electric bill, or a house with no solar panels and a higher monthly electric bill? Of course, you would want the ability to save money with a solar system and guess what, so would a potential buyer of your home, too. Recent reports state that, on average, a home with a solar system sells for over 4% over a comparable home without it. What’s more is that a solar powered home also sells faster, which in a competitive market can make a big difference. So not only do solar panels add value to your home and save monthly electric costs for you and the buyer, but they will also help your home sell faster! 

Potential Battery Backup

If you live somewhere that suffers from frequent power losses, a battery backup system that is connected to your solar system might make a big difference to your quality of life. All over the United States, areas suffer from both aging infrastructure of the power grid and frequent natural disasters that can knock out electricity. Losing electricity can cause your food to spoil, make it impossible to flush toilets, cause your home to be so cold/hot it becomes uninhabitable, or just make your living environment less safe. That’s not to mention that in some areas of the US criminals take advantage of power losses that knockout cameras and security systems and look to break into homes. Nothing feels better than having power when others do not and being able to help friends and neighbors in need. 

The Solar Savings Start on Day One

Unless you pay with cash (and good for you if you do), switching to solar can start saving you money from day one. Once installed, solar panels immediately begin generating power from the sun and helping to offset and often cover your electric bill. The worlds filled with investments that take time to produce results. Lucky for us, solar is one of the few that start working for you immediately.

Passive Income Baby

Whether you want to call it income or savings, you were paying a bill before and now put that same money towards a home improvement. Heck, sometimes you put that money towards an investment in your home AND still saving on your monthly energy bill. Saving money is always better than earning money because:

• You don’t pay taxes when you save money like you do when you earn additional money

• Savings basically do not change and are consistent

• By making the sun do the work, you enjoy a passive income that can offset energy bills and pay off the solar panels

• Most times, you can use the savings to help pay down debts such as car payments or house payments, meaning that you might save years off your mortgage just by using money you were previously paying the utility company.

This is one area I am most excited about! As a graduate of finance, I love seeing ways that people can protect their bottom line with no risk to themselves. Investing in the stock market has risks. Speculating in real estate carries risks. Reducing your monthly utility bill, well, that’s about as risk free as an investment comes!

Solar Power Comes With a Warranty

When you agree to have solar panels placed on your home, you would expect someone to stand behind the product you are investing in, right? Well, the good news is that most solar companies warranty their product anywhere from 10 to 30 years. So assuming you find the right company, you can expect to get a product and still have parts and labor covered long after it has already paid for itself. That’s a pretty fantastic deal if you ask me.

Have a warranty question? Visit jonnelsen.com to get connected with a 30 year warranty with one of the largest and fastest growing residential solar companies in the nation.

Decrease Dependance on Foreign Oil

Depending on the current administration in the White House and the party in charge of congress, the US imports up to 50% of its oil from foreign sources. While that fact might not surprise many people, it might surprise them to know that the United States is often the top oil producer in the world. So increasing the national investment into solar energy has the potential to help eliminate the oil we import from foreign sources and allows us to invest in local generation of oil and natural gas.

Solar Is Obviously Great for the Planet

Everyone knows solar is great for the planet and our future, but do you know why? The biggest reason is because in the US much of our power comes from coal. Coal power plants are the single most expensive and dirtiest forms of energy production exist. It takes over thousands of pounds of coal to power the average US home for a year! Residential rooftop solar production can eliminate the toxic coal particles from entering the atmosphere and our lungs! This is one reason I am passionate about solar energy. I want my son to grow up in a world that is cleaner than the one I grew up in, and I hope he has the same goal for his children as well. 

Traditional Energy Travels a Great Distance and Suffers From Energy Loss Along the Way

As we previously discussed, the United States has three energy grids that power the country. They are the Eastern, Western, and Texas Grids. With only three potential grids to draw power from, that means that the energy travels a significant distance across the land to get to your home. On average, about 5% of the power that is produced is lost simply by traveling through the wires before it reaches your home. That is not to even account for the cost and spent energy needed to power the trucks, buildings and storage facilities associated with traditional energy production. Now with solar, the power produced travels instantly into your house, resulting in almost no loss and when your rooftop generates excess energy, it’s sent to the grid. That excess is measured at your house before it enters the power lines, meaning you get full credit for what you produce.

Solar Panels Are Extremely Durable and Almost Maintenance Free

A common misconception is that solar panels are very fragile. While that is partially correct because the actual solar panel is very fragile, the glass and frame that enclose those panels are extremely durable and built to withstand punishment from the elements. Most panels can handle any extreme wind, hail, and debris that Mother Nature can throw at them. In addition, they are easy to maintain and might only require a basic cleaning once or twice a year to help keep some of the dust and dirt off the glass. While that basic cleaning is truly unnecessary to their function, it will lower efficiency over time if not removed. Most homeowners will find that rainwater does most of the work in keeping the panels relatively free of dust and a homeowner or solar professional can do a simple annual cleaning easy enough. Most times, I recommend you call the professionals as they’re insured against any issues and have the experience and tools to do the job quickly and correctly. If you are determined to save the money and do it yourself, there are many YouTube videos that help walk you through the process, and we will discuss it later in this book as well.

Solar Energy Is a Job Creator

Currently (2022) the United States solar industry is directly responsible for about 250,000 local jobs and indirectly responsible for countless more. While many industries are downsizing or laying off workers, solar is expanding as more homeowners and companies seek to take control of their future. If you wish to join the solar revolution and be part of a growing industry, you can schedule a FREE Solar Savings Analysis and I will be happy to get you connected with a better future in solar. Opportunities are endless, whether you are looking for a side hustle, part-time, or full-time employment. And if you are a homeowner making the switch to solar, you can feel good about the fact that the decision you made to go solar directly affected several people in your neighborhood and across the US. 

Solar Takes Advantage of Underutilized Space

That rooftop of yours doesn’t really have anything better to do, right? Or perhaps you want to keep your roof free, and would rather focus on underutilized land on your property? Either way, you can benefit from the flexibility of solar to generate revenue on your property using land and rooftop that would otherwise go to waste.

Solar Panels Keep Your Rooftop Cooler

One frequently ignored benefit of solar panels is the fact that they help reduce the amount of direct sunlight reaching your rooftop and therefore reduce the overall temperature of the roof. This can translate to significant energy savings during those hot summer months. Capturing that sunlight turns the sun from an enemy to an ally as you seek to reduce energy bills. Put another way, simply having solar panels on the roof collecting that scorching summer sun might allow you to reduce the time you have the AC blowing and save additional money each month. This is especially useful to those who live in warm climates and use the AC often.

Solar Panels Can Work Even Better in Cold Weather

Believe it or not, cold weather is actually a great time for solar panels. Short of being buried under snow (which will melt faster with panels underneath) that winter cold helps the panels function even more efficiently. When there is snow on the ground but the panels are clear, homeowners benefit from The Albedo Effect, so the light color of the snow helps reflect sunlight up rather than being absorbed into dark surfaces. 

Solar for Off Grid Use

One popular function of solar is the ability to generate your own power and thus be able to remove yourself from the grid. While I don’t recommend this, as there are many benefits of being associated with the grid and its infrastructure, it’s the hope for some that they can remove themselves from reliance on society and be more self-sufficient. Solar panels and a strong battery backup system will be helpful in creating energy during peak hours and distributing it when you need it after dark.

Using the Existing Utility Infrastructure for a Small Monthly Fee

While a select few enjoy the idea of being “off the grid”, for most people, connectivity is important. Being part of the grid offers many benefits and sometimes allows you the ability to receive energy credits when you generate excess power. To stay on the grid, it can cost as low as $10 a month and grants you access to everything you had while paying a larger energy bill. This protects you from ever being without power, even while waiting for a repair or replacement should something ever happen to your panels. 

There you have it folks, a good number of reasons it makes sense to switch to solar. While this is not an exhaustive list, as I know there are plenty of more reasons someone might make the change, this covers most of the largest reasons. But you know what, every situation is different and maybe you have your own reason for wanting to take control of your energy. That’s ok, when speaking to a solar consultant they can help you understand if it makes sense for your family to make the switch and if solar will truly solve the problems you want it too.

Let's discuss your energy goals and find out if solar makes sense for you with a short virtual meeting.


  • Solar for $0 down
  • Save up to 50% on your energy bills
  • Increase your home value
  • Get clean renewable energy
  • Get a 30-year warranty
  • Customized proposal and best value

Let's talk about going solar!

Jon Nelsen | Solar Consultant



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