Power Companies Losing Out To Rooftop Solar??

by John Vincent, former Montana Public Service Commissioner

America’s utility industry, “Big Power,” is, by their own admission, scared.  Made up of large corporations with huge and profitable investments in centralized generation and long distance, high voltage transmission (profits mostly guaranteed by monopoly status and government regulation), they are facing what their own industry calls a “death spiral,” – the likelihood that the loss of demand (need) for the power they sell will put an end to “business as usual,” (the old energy paradigm).

On Rooftops, A Rival For Utilities”, a 7.28.2013 NY Times article by Diane Cardwell, details the industry death spiral, and ties the spiral into net metering and its strong appeal to potential rooftop solar users:

Net metering right now is the only way for customers to get value for their rooftop solar systems,” said Adam Browning, executive director of the advocacy group Vote Solar.

Mr. Browning and other proponents say that solar customers deserve fair payment not only for the electricity they transmit but for the value that smaller, more dispersed power generators give to utilities. Making more power closer to where it is used, advocates say, can reduce stress on the grid and make it more reliable, as well as save utilities from having to build and maintain more infrastructure and large, centralized generators.

But utility executives say that when solar customers no longer pay for electricity, they also stop paying for the grid, shifting those costs to other customers. Utilities generally make their profits by making investments in infrastructure and designing customer rates to earn that money back with a guaranteed return, set on average at about 10 percent.

“If the costs to maintain the grid are not being borne by some customers, then other customers have to bear a bigger and bigger portion,” said Steve Malnight, a vice president at Pacific Gas and Electric. “As those costs get shifted, that leads to higher and higher rates for customers who don’t take advantage of solar.”

Whether it’s on-site solar (the main focus of this article), conservation, efficiency, distributed on-site or locally distributed power from other alternative energy sources, smart grid and micro grid technology or more efficient home appliances (the new energy paradigm), “Big Power” sees the day coming when sufficient need and market demand for the power they sell will no longer exist. Of course, they will do all they can to prevent that from happening, and that fight will be coming soon to a legislature and public utility/service commission near you.

One of the huge benefits of the new energy paradigm will be the rapidly decreasing need for any new high voltage, long distance transmission lines. Every day the new energy paradigm gains strength and momentum is a day that further diminishes the need for projects like NorthWestern Energy’s MSTI line and all the environmental, financial and private property rights problems it raises.

So, whether it’s rooftop solar in California or energy efficiency programs and small scale, on-site solar, wind or micro hydro projects in Montana, it all pushes the new energy paradigm forward. And that’s a good thing.