I read your Op Ed piece (“Disruptive Forces) in the November issue of Power Engineering. I could not agree with you more about the fact the utility industry needs to accept the fact that distributed energy is here to stay and either they get on board or get run over by it. I have been advocating to people for a long time that the utilities need to stop trying to prevent homeowners from installing solar energy, windmills, etc. and start figuring out how they can be a part of the deployment.
If we look at some of the European countries, especially Germany, they have supported solar energy through feed in tariffs and subsidies to the point where they have a huge installed solar base and it is making a notable impact of the amount and type of energy that they as the utility industry must deliver. They are now going further and subsidizing battery storage so that even more can be accomplished with solar energy. I don’t know how they maintain the cost to support their existing infrastructure, but I don’t think that charging a flat fee to everyone to support the existing infrastructure would be unacceptable to consumers if it is properly explained to them.
What the utility industry here in the U.S. needs to do is to figure out how they can be the supplier, installers, maintainers and the owners of the panels and then be selling the power to users. They already have a meter they own hung on the side of the house, so why not go further and own the panels on the roof that produce the power? A well-designed solar system does not require much maintenance, so once it is installed the cost to maintain such a system may actually be lower in cost than the transitional infrastructure used to deliver power.
There is no place for the utilities to hide in saying they can’t make money and it would be too costly for them to enter this business. If that is true, how is it that Solar City can make money? Elon Musk is not a fool, he sees the value of installing solar energy on people’s homes and he is making a lot of money doing so, and if he can do it and make money why couldn’t a utility?
The bottom line is that a lot of the larger older utilities are still managed by an old guard that don’t want anyone else playing in their industry. These people are out of touch with the changing world of distributed energy and they are going to lose a lot more. You might be better off to make an analogy between these stubborn utilities and Blackberry. Like Blackberry, these utilities are going to see their market taken away from them whether they like it or not, and as their business diminishes and they become vulnerable financially they may become the acquisition and takeover targets of the utilities that do embrace the changes that are taking place in the industry.
Bradley Schneider, President/CEO
Recovered Energy Resources Inc.
Power Engineerng Issue Archives
View Power Generation Articles on PennEnergy.com