Utility Companies See Rooftop Solar Energy as Business, Grid Threat
July 31, 2013 4:18 PM
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They're trying to slow the adoption of solar energy through lawmakers
Utility companies around the U.S. fear that solar companies and renewable energy incentives will replace traditional electricity.
According to a report from
The New York Times
, utility companies view
rooftop solar energy
as a threat to their traditional business model of providing electricity maintaining the grid.
In fact, some utilities have said that they should've fought the solar "disrupt" and are currently working to push back against government incentives for the renewable energy.
The utility companies' worries may seem a little ridiculous at present, considering rooftop solar energy alone accounts for less than a quarter of 1 percent of the nation’s power generation.
However, incentives around the country aim to expand the use of solar power in a big way. For instance,
California has a system
called net metering, which pays both commercial and residential customers for their excess renewable energy that they sell back to utilities. California pays customers very well through this credit system because the payments are bound to daytime retail rates that customers pay for electricity -- such as utility costs to maintain the grid.
reports that from 2010 to 2012, the amount of solar installed each year has increased by 160 percent.
At present, 43 states, the District of Columbia and four territories offer incentives for renewable energy in some form or another.
Solar proponents add that solar customers deserve payment and incentives for their efforts because making more power closer to where it is used (when resold to local utility companies) can alleviate stress on the grid -- making it reliable. It also helps utilities by relieving them from having to build infrastructure and sizable generators.
However, utility companies feel differently. Their argument is that
, at some point, may stop paying for electricity, which means they also stop paying for the grid. This shifts the costs to other non-solar customers.
According to California's three major utility companies, they could lose as much as $1.4 billion in annual revenue to solar customers when the state's subsidy program fills up to full capacity. This means that about 7.6 million non-soalr customers would have to make up for that, paying as much as $185 per year each.
This leads to something utility companies call the "death spiral." This refers to the costs being shifted to non-solar customers, and because of this burden, they switch to solar-powered rooftops -- making utility companies' troubles even worse.
For that reason, utilities have requested that lawmakers limit those who can participate in such programs, including net metering.
Some utility companies are adding rooftop solar to their services, such as Dominion in Virginia. But not all are willing to adapt, and while solar still only amounts to a small percentage of power generation in the U.S., it seems utilities are looking to prevent the renewable energy emergence from spreading.
The New York Times
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It's for the public good. It's for the sake of society.
7/31/2013 5:20:13 PM
That would be a great thing if we were all self-sufficient and generated enough electricity with our roof top units. But you know what will happen. The companies, still loaded with cash, will lobby politicians to pass the costs off to taxpayers in the form of taxes. They'll market the idea as "the responsible thing to do to contribute to society". They'll use Obamacare as a precedent to show that it is acceptable to pass off the price of a private product to the general public as a tax, with the reasoning that it helps society and is for the common good of the public.
Of course it'll stifle competition and innovation, and the power companies and politicians know this. But you can't let a little reality get in the way of a perfectly good bribe, I mean lobbying effort.
Imagine if this mentality was around during the turn of the century (1900s). You'd have the government blocking the widespread use of automobiles by adding a tax to help funnel money to farriers and other horse-related occupations. They'd say that while cars are an interesting novelty, they're just not worth the economic costs to society in the form of putting farriers, horse vets, horse feed suppliers, and the rest of that supporting industry out of work.
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