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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Corporatism versus Capitalism
8/1/2013 3:03:40 PM
This is a perfect example of how Corporatism (companies working with or paying off government for their own benefit) is taking over world wide. They already have a massive grip in Europe, they have been the real power behind Russia since the wall fell, and now they're expanding their grasp in previously untouchable US... all thanks to a money hungry socialist president who loves pitting both sides against each other, then walks away laughing as he takes off for another round of golf.
Yet in a proper Capitalist system that we used to have, the utility companies would adjust their system and start working their way into what the people are buying, not prevent them from buying it. Or they would research and find something bigger and better for the people to buy.
If they really wanted to work within the Capitalist system, they would hire people and offer solar or wind installation (depending on the location), and just have the customer pay them some formula that combines the average usages over the past year or two and the cost of installation. In my area (on my 2000 sq ft house in north FL) it could work out to around $150 per month for 6-8 years (after which they pay only for what they use from the grid). If they play their card right, they could set the agreement so when a customer gives more to the grid than they take, they pay or are paid $0. If they take more from the grid than they make, then they get a monthly bill. They could likely also add the option that for $50 per month, the power company can maintain the solar system.
This way when there is excess, it is used in the grid, and when the house needs more, it is taken from the grid. In the end they are getting miles and miles of essentially free power and the people are more or less just paying for the solar panel system itself on a payment plan.
"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone
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