Monday, October 27, 2014

Make way for solar

Rooftop solar is just the beginning; utilities must innovate or go extinct

Solar PV is mostly a threat to utility investors and shareholders, not ratepayers

By David Roberts, Grist
21 Oct 2014

By now, most people are aware that solar power — particularly distributed solar power, in the form of rooftop panels — poses a threat to power utilities. And utilities are fighting back, attempting to impose additional fees and restrictions on solar customers. These skirmishes generally center on “net metering,” whereby utilities (forced by state legislation) pay customers with solar panels full retail price for the power they produce, which can often cancel out the customer’s bill entirely. That’s lost revenue for the utility.

Net metering, however, is largely a distraction, a squabble over how long utilities can cling to their familiar business model. Larger reforms are inevitable, because the threat to utilities goes far beyond solar panels and demands a response far more substantial than rate-tweaking. Sooner or later, there must be a wholesale rethinking of the utility business model. And if utilities are smart, they’ll do it sooner.

To understand why, let’s have a look at two recent analyses. One examines the short-term issue for utilities, revealing the core problem lurking within. The second pulls the lens back to take in the big picture.

(Continued here.)

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