Understanding Fungibility in Energy and Finance

When you make a deposit of 100 dollars at a bank, and other customers make thousands of deposits, the money is aggregated. On the following day, the funds can be withdrawn by any customer. Interestingly, your original deposit loses its unique identity and association with you. This principle is known as fungibility, which applies to both finance and energy.

In the context of energy, especially with interconnected grids, it becomes impossible to trace the origin of the electricity being consumed. If you generate solar power and sell it to the grid, it's fair to say that government agencies may contribute to the consumption of your solar energy, even if they do not buy directly from you.

Role of the US Government in the Energy Sector

The US government does not operate in the utility business. Instead, electric utilities across the country are commercial or cooperative enterprises that are regulated at the state and regional levels as monopolies. Most utilities offer a feature called "net metering," which credits customers for excess energy they generate and send back to the grid. This credits can often be carried over for a certain period, but some utilities may not allow credits to accumulate indefinitely, opt for cash payments, or discard them if not used.

Government Purchases of Solar Energy

Often misconstrued, the question of whether the US government buys solar electricity is related to where the government consumes energy. In any government installation, the energy consumed is paid for by the local utility. If the utility supplies solar energy, then the government directly contributes to the consumption of solar energy.

While it's true that solar panels can be installed to reduce the cost of purchasing energy from utilities, this is primarily a strategy to save on expenses rather than a mechanism for the government to directly buy solar energy. The government does buy power from the utility grids, and if the utility has a solar component, the government is indeed buying solar energy.

Examples of Government Energy Installations

Consider the Tennessee Valley Authority (TVA) and the Hoover Dam. These are exceptions where the government is heavily involved in energy production through their own facilities. For instance, the TVA produces and distributes both thermal and renewable energy, including solar and wind.

In terms of reducing costs, the US government can install solar panels in their facilities to generate their own energy. This practice not only offsets the cost of buying energy from the local utilities but also contributes to the sustainability goals of the government.

Conclusion

The question of whether the US government buys our solar electricity energy is more nuanced. While the government does not directly buy solar energy from individual households, it does contribute to the consumption of solar energy through its installations in government facilities. Government purchases of solar energy are a part of broader efforts to reduce energy costs and promote renewable energy.

References

1. US Department of Energy
2. Tennessee Valley Authority
3. Hoover Dam Historical Electricity Production Milestone