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Utilities Should Worry; Rooftop Solar Could Soon Cut Their Profit
Lucas123 writes A study by the Lawrence Berkeley National Laboratory predicts that distributed rooftop solar panel installations will grow from 0.2% market penetration today to 10% by 2022, during which time they're likely to cut utility profits from 8% to 41%. Using those same metrics, electricity rates for utility customers will grow only by as much as 2.7% over the next eight years. By comparison, the cost of electricity on average rose 3.1% from 2013 to 2014. The study was performed for the Office of Energy Efficiency and Renewable Energy under the U.S. Department of Energy. One of the main purposes of the study was to evaluate measures that could be pursued by utilities and regulators to reduce the financial impacts of distributed photovoltaics.
And you think the utilities will suffer because of this? Here in Australia power companies have just started bringing in (opt-in for now) billing at different rates for different times of the day for all a house's power. They will simply make day-time power prices stay the same and increase prices for night-time usage, passing the loss on to customers as they always have.
Quite naive to think a company would accept the losses themselves.
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Utilities are boring because they do a simple job which generates small but predictable profits. Therefore investors put their money into them in the expectation that they will remain boring.
When a new development comes along that destroys their business model, one of two things will happen; they will increase their prices, or they will go out of business. Note that 'the government taking them over' is a subset of 'they will increase their prices'. The service that they provide; a reliable baseload supply and a safe network to distribute electricity HAVE TO BE PAID FOR. At the moment those costs are hidden in the average cost of a kWh. If private solar power reduces the average demand some of the time, the average cost of a kWh will have to be increased, or the other features be recognised and paid for.
Ladies and gentlemen, there is no such thing as a free lunch, despite politicians pretending otherwise for several thousand years.
Utilities actually have two businesses: Generation and distribution. We pay one bill and conflate the two. Solar just makes it clear they are different.
With home solar increasing, utilities will just invest less and less in generation. The transition is pretty gradual, so they can adapt just fine. Profits from generation will decline ... life will go on. But only if we accept that distribution also needs to be paid for.
If and until home power storage also becomes economical, homes are still going to need to connect to the grid. That infrastructure will need to be paid for. It's going to be tacked onto the utility bill. In the past, we subsidized small users by paying by the kwh. Now we have to decide if connection fees are more appropriate. That's what the debate is going to turn into.
The world is made by those who show up for the job.
Plus there are cases of outright bans on some kinds of solar setups (I cant find a cite right now but there have been cases where people have wanted to install solar panels and a battery bank or whatever and completly disconnect from grid power but have been prohibited from doing so by state and local laws)
What happens if you don't pay your power bill and they come and disconnect you themselves? If they come and see the solar and have been instructed by company brass to forgo the disconnection in those cases, let the poor (that DO get disconnected) and their advocates know... won't take long before that changes.
When the copyright term is "forever minus a day", live every day like it's the last.
Most people have this preconceived notion of 'what we need' and we in the first world are all in reality 'rich'. I live on less than minimum wage in a cold climate, and built a 750+- square foot home, off-grid with a design based on 2KWh/day but can generate 4+ most sunny days... With exception to some industrial/manufacturing facilities, if you have some southern exposure you can live off-grid and it be very affordable, it's just a question of changing our wasteful power consumption habits or paying more in solar setup.
Stuff I run, Fridge, laptop, inet, security cameras, microwave, digital pressure cooker, washer, well pump, dishwasher(no heat cycle), typical household tools... $150 backup gas generator if it's necessary(hasn't been). Wood stove for heat, cooking.
Oh, also I have a utility pole 20 feet away, but SKIPPING the required taxes/connect fees and forced 'certified labor' to actually get electricity paid for more than half my solar setup...
If the general home owning public ever 'wakes up', utilities should fear for their profits, tho. I think most people are imprisoned in condo/apts and city life, so it's not like they are going to go out of business.
Rooftop solar flattens the daytime peak and cuts down on the maximum capacity needed to be produced and transmitted (along wires of course, but that's the word) from other places, so it does eventually pay for itself even when the money thrown at it is excessive. A bit of a problem is that throwing excessive amounts of money around builds political influence, but that's not a solar problem per se. Stop throwing money at it and they'll still be some takeup, especially in areas where utilities are indulging in excessive price gouging.
Sane electricity prices would include a base rate for infrastructure and reserve capacity, and a cost per usage. Most people just pay the usage fee. I
It makes sense to me, if I have a PV roof, I still pay a base rate to the electric company to maintain the lines so I can have electricity when my roof is not generating.
You, on the other hand, should see someone about all that irrationality.
With respect, take a look at a chart showing air pressure across your continent. Consider what it means in terms of wind, especially since windmills are spread out quite a bit now. The "wind is always blowing" thing is reality on the scale of a continental grid, even an electricity grid in Europe since there are such large interconnections between countries. If you look at a North American air pressure chart and the size of the US+Canada grid it's even more obvious.
I've never had anything to do with windmills and don't even like them much but I'm sick of all the politically motivated bullshit attacking anything in power generation that is seen as remotely "green", and that's why I called the GP poster to task for his bullshit.
So you are arguing against widely distributed small generators on that basis? They provide LOCALIZATION OF PRODUCTION by their very nature, so I suggest you be a bit more honest about your reason for objecting to them.
It's a base load solution with a large capacity and is very expensive to turn off and on for peaks where you need a bit more capacity. Anybody who raves on about "one true energy" whether it is solar, wind, nuclear or coal is either selling something or has been conned - the answer is a mix of energy sources. It's cheaper to fire up a gas turbine (or several) than an entire coal or nuclear base load unit if you don't need the full capacity of a base load unit. Although wind has a lot of drawbacks it has a niche. Although photovoltaics are very expensive they now also have a place and are making a positive impact.
Banks don't put up loans for nuclear plants. Guess where the interest free loans and insurance comes from. Solar and wind are peanuts in comparison.