5 Trends in the Electric Power Industry Business Owners Should Look out for in 2018
To put it simply, 2017 was a tumultuous year for businesses in the electric power industry. With the uncertainty that came with President Trump's inauguration, it was anticipated that things would be a bit rocky for renewable energy resources. The Republican president conveyed a strong affinity for coal over renewable energy, and our country saw a shift toward uncertainty when it came to predicting the future of renewable energy.
But, now that 2018 has come around, we'll be able to map out the rest of the year based on trends from 2017 and those expected to arise in the rest of the year. Let's take a closer look at what's anticipated.
1. Solar Energy Progress Will Slow
After Trump's questionable decision to impose a 30% tariff on solar panels that are imported into the United States, many experts fear the results. Not only will the tariff reduce the influx of imported panels, it will also eliminate jobs in the industry. Unfortunately, analysts predict that the number of jobs lost will be somewhere near 23,000.
Over the past decade, solar energy has proven to be a segment of the economy that showed great potential for growth. This coming year, we can expect that momentum to come to a halt. Unfortunately, the troubles don't end in 2019. The tariff is expected to drop to 15% in the future, but this will only happen after four years have passed.
While a tax on imported solar panels isn't the end of the world for the industry, it is a significant setback. And, its residual effects are sure to be felt over the next 11 months.
2. Environmental Regulation Reversals
Much like the effect of the imposed tariffs, the electric power industry will be shaken up a bit further by the EPA's decision to rollback various environmental regulations. But, unlike the tariffs, the effects are actually beneficial for companies in the industry.
However, these benefits don't come without a cost. With the ever-growing threat that climate change presents to the entire world, now is certainly not the time to begin dismantling efforts to reduce our nation's carbon footprint. But, some business owners claim that the previous regulations were too limited and made it difficult to grow their companies.
Regardless of how a company feels about their carbon footprint, they'll now have more leeway to work with.
3. Natural Gas Production Will Increase
While the solar panel industry is expected to be hampered by the new tariffs, natural gas production is projected to increase during 2018. Analysts have projected it to be even higher than last year, as both usage and production has been on the rise since 2015. The EPA's lax regulations for 2018 will certainly play a role in the increase, but the growth is not expected to be drastic.
The increase in production is partly driven by the growing increase in consumption. Residential, commercial, and industrial consumption are all expected to be higher than last year.
4. Businesses Will Foster Their Relationships with Consumers
As previously mentioned, today's political climate is one of tumultuousness and unforeseen circumstances. But, this means that it's more important than ever for businesses to connect with their consumers and gain their loyalty. Carbon footprints are expected to be a large factor in consumer trust, despite the EPA rolling back regulations.
Businesses that voluntarily reduce their carbon footprint will have a far easier time communicating with customers who strive to fight against the issue of climate change. This also means we're likely to see advances in accessibility, such as improved online interfaces and more responsive staff.
5. Adapting to Tax Reform
A great example of the aforementioned uncertainty is Trump's tax reform, which is the largest in over three decades. While the potential results are not inherently negative, business owners throughout the industry have expressed concern. In 2017, all we could do was predict how it would play out.
In 2018, it's time to finally see how the tax plan will affect businesses in the electric power industry. Throughout 2018, businesses will begin to adapt to its effects and reshape their game plan for the remaining months of the year. Specifically, the employees at utility organizations who will feel the change the most are those with tax and finance roles.
While 2018 may seem like a year of uncertainty, it will be one that tests how reactive companies in the electric power industry are. As long as business owners have a solid plan that's open to a bit of change, everything should run smoothly.
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