Solar panels could destroy U.S. utilities, according to U.S. utilities

[one...two...tree 2,762]

Solar power and other distributed renewable energy technologies could lay waste to U.S. power utilities and burn the utility business model, which has remained virtually unchanged for a century, to the ground.

That is not wild-eyed hippie talk. It is the assessment of the utilities themselves.

Back in January, the Edison Electric Institute — the (typically stodgy and backward-looking) trade group of U.S. investor-owned utilities — released a report [PDF] that, as far as I can tell, went almost entirely without notice in the press. That's a shame. It is one of the most prescient and brutally frank things I've ever read about the power sector. It is a rare thing to hear an industry tell the tale of its own incipient obsolescence.

I've been thinking about how to convey to you, normal people with healthy social lives and no time to ponder the byzantine nature of the power industry, just what a big deal the coming changes are. They are nothing short of revolutionary … but rather difficult to explain without jargon.

So, just a bit of background. You probably know that electricity is provided by utilities. Some utilities both generate electricity at power plants and provide it to customers over power lines. They are "regulated monopolies," which means they have sole responsibility for providing power in their service areas. Some utilities have gone through deregulation; in that case, power generation is split off into its own business, while the utility's job is to purchase power on competitive markets and provide it to customers over the grid it manages.

This complexity makes it difficult to generalize about utilities … or to discuss them without putting people to sleep. But the main thing to know is that the utility business model relies on selling power. That's how they make their money. Here's how it works: A utility makes a case to a public utility commission (PUC), saying "we will need to satisfy this level of demand from consumers, which means we'll need to generate (or purchase) this much power, which means we'll need to charge these rates." If the PUC finds the case persuasive, it approves the rates and guarantees the utility a reasonable return on its investments in power and grid upkeep.

Thrilling, I know. The thing to remember is that it is in a utility's financial interest to generate (or buy) and deliver as much power as possible. The higher the demand, the higher the investments, the higher the utility shareholder profits. In short, all things being equal, utilities want to sell more power. (All things are occasionally not equal, but we'll leave those complications aside for now.)

Now, into this cozy business model enters cheap distributed solar PV, which eats away at it like acid.

First, the power generated by solar panels on residential or commercial roofs is not utility-owned or utility-purchased. From the utility's point of view, every kilowatt-hour of rooftop solar looks like a kilowatt-hour of reduced demand for the utility's product. Not something any business enjoys. (This is the same reason utilities are instinctively hostile to energy efficiency and demand response programs, and why they must be compelled by regulations or subsidies to create them. Utilities don't like reduced demand!)

It's worse than that, though. Solar power peaks at midday, which means it is strongest close to the point of highest electricity use — "peak load." Problem is, providing power to meet peak load is where utilities make a huge chunk of their money. Peak power is the most expensive power. So when solar panels provide peak power, they aren't just reducing demand, they're reducing demand for the utilities' most valuable product.

But wait. Renewables are limited by the fact they are intermittent, right? "The sun doesn't always shine," etc. Customers will still have to rely on grid power for the most part. Right?

This is a widely held article of faith, but EEI (of all places!) puts it to rest. (In this and all quotes that follow, "DER" means distributed energy resources, which for the most part means solar PV.)

Due to the variable nature of renewable DER, there is a perception that customers will always need to remain on the grid. While we would expect customers to remain on the grid until a fully viable and economic distributed non-variable resource is available,

one can imagine a day when battery storage technology or micro turbines could allow customers to be electric grid independent

. To put this into perspective, who would have believed 10 years ago that traditional wire line telephone customers could economically "cut the cord?" [Emphasis mine.]

http://grist.org/cli...aign=socialflow

[Mr. Big Dog 10,747]

So utilities go away. I won't shed a tear. They've been ripping me off since I arrived in this country. Particularly bad here in Florida where ratepayers get to pay over a billion dollars for a nuclear power plant that will never, ever generate a watt of energy. The utility makes out like a bandit in this bad investment, though. Power or no power, they get to cash in. Screw utilities.

[Iraqvet 68]

It takes alot of panels to produce the kind of electricity you would need to run a house hold with a central air conditioner. IMO is not a very good investment. Using a few panels to lower your monthly utility bill would be nice to have but will be a long time before you are saving money. Unless it grows on a tree in the backyard. I dont think the grid will reduce anytime soon due to solar power. IMO

Edited April 10, 2013 by Iraqvet

[The Nature Boy 4,224]

So utilities go away. I won't shed a tear. They've been ripping me off since I arrived in this country. Particularly bad here in Florida where ratepayers get to pay over a billion dollars for a nuclear power plant that will never, ever generate a watt of energy. The utility makes out like a bandit in this bad investment, though. Power or no power, they get to cash in. Screw utilities.

You don't have to do biz with them. Turn off your electricity It's a choice

[Mr. Big Dog 10,747]

You don't have to do biz with them. Turn off your electricity. It's a choice.

No, it's not a choice. I need electricity and have no choice where to get it from. For me, it's TECO. That's the only provider for this product. Over in socialist Europe, they have actual competition in that market. Each household has the choice among a number of providers for their electricity much in the same way in which you have a choice of providers when you're in the market for a phone, internet access, a car, milk or shoes. But we don't like competition here. We like corporations being able to rip off their forced customers all sanctioned by bought and paid for PUCs. Lenin would be proud of this model.

Edited April 10, 2013 by Mr. Big Dog

[Darnell 8,478]

we have competition in Texas, for electricity utilities, all servicing the same address, for example.

Oh well.

back to the OP - stupid utility companies - they decide NOT to change their business models at all - they could have gotten into a huge business of leasing out roof-top USA-made solar panels 6 years ago, and didn't do it. Now there's not a USA Solar-panel manufacturer.

#### em, really.

[Mr. Big Dog 10,747]

back to the OP - stupid utility companies - they decide NOT to change their business models at all - they could have gotten into a huge business of leasing out roof-top USA-made solar panels 6 years ago, and didn't do it. Now there's not a USA Solar-panel manufacturer.

#### em, really.

Just wait. They'll get the PUCs to declare that you have to pay the utility for the sunlight you convert. And then you'll have the corporate shills tell you that you only pay because you elected to consume sunlight.

Edited April 10, 2013 by Mr. Big Dog

[Darnell 8,478]

well, in Texas, if'n you had solar panels and generated excess, the utility companies were obligated (and still are) to buy back any extra generated power from yer address.

Same for wind turbines, also.

[Mr. Big Dog 10,747]

well, in Texas, if'n you had solar panels and generated excess, the utility companies were obligated (and still are) to buy back any extra generated power from yer address.

Same for wind turbines, also.

Good for Texas. It's precisely what they do overseas as well. Good to know that at least some of the states are learning. Florida sure doesn't. It's as corrupt as it is in some African nations around here.

[Ban Hammer 13,400]

Good for Texas. It's precisely what they do overseas as well. Good to know that at least some of the states are learning. Florida sure doesn't. It's as corrupt as it is in some African nations around here.

what's your kw/h rate there?

[Mr. Big Dog 10,747]

what's your kw/h rate there?

~ $0.09.

[lostinblue 1,989]

You could buy your own solar panels and never get ripped off again. Wonder why you you don't....Perhaps cost?

[Mr. Big Dog 10,747]

You could buy your own solar panels and never get ripped off again. Wonder why you you don't....Perhaps cost?

It's the wrong argument. What is wrong with electricity being available to consumers from a competitive market? When did competition become a bad thing?

[Mr. Big Dog 10,747]

I'm at $.15 with PG&E. I think thats still lower then what I was paying with E-On on the other side of the atlantic.

That might be the case. But it's also irrelevant to the discussion. We either hold that competition is good for consumers or not. If it's good then it would appear that competition would force your electricity rates down. Consumers certainly have benefited from competition in other consumer product markets that once were monopolies.

Edited April 11, 2013 by Mr. Big Dog

[I AM NOT THAT GUY 5,715]

You could buy your own solar panels and never get ripped off again. Wonder why you you don't....Perhaps cost?

The sun doesn't shine at night?