Monday, September 9, 2013

drag2share: America's Solar Revolution Is Twisting The Utility Industry Into Knots


This week, we gave you two extremely bullish projections for the future of solar energy in America.

The focus was on distributed generation in both cases. This includes all solar installations — even small ones on your home rooftop.

Interestingly, the renewable energy revolution is being led by independent power producers and not mainline utility companies. 

While net generation among the former has climbed 1,283% since September 2006, electricity from solar gained just 112% for the latter during the same period.

See the chart below:

solar generation

Currently, solar still only meets less than 1% of U.S electricity needs. And it will stay that way for a while. 

That's because some big utilities are actively resisting solar, arguing that the cost of net metering schemes — which allow renewable energy users to sell back excess power to — are often being paid by residents who can't afford solar.

Here's how Dave Gram of the Associated Press rec ently quoted a rep for a small utility in Vermont, which is being forced to roll back its net metering scheme:

Not collecting those costs from all members "results in a cost shift to those members without net metered installations," Washington's general manager, Patricia Richards, said in an email. "As a not for profit electric utility, which is owned by our members, our only recourse for recovering insufficient revenue is to increase rates."

At the same time, utilities are also recognizing that any kind of curb in renewable use is just a stopgap.

Long term, they're probably in trouble.

Here's the New York Times' Diane Cardwell quoting Clark Gellings of the Electric Power Research Institute, a utility industry association: "We did not get in front of this disruption...It may be too late."

And earlier this year, Bloomberg's Chris Martin and Noreen S. Malik quoted the CEO of Duke Energy, the largest utility owner in the country, that solar was truly disruptive.

"It is obviously a potential threat to us over the long term,” said Jim Rogers, chairman and chief executive officer of Duke Energy Corp. (DUK), the largest U.S. utility owner.

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