Solar panels could destroy U.S. utilities, according to U.S. utilities

[Scuba]

http://grist.org/climate-energy/solar-panels-could-destroy-u-s-utilities-according-to-u-s-utilities/

Solar power and other distributed renewable energy technologies could lay waste to U.S. power utilities and burn the utility business model, which has remained virtually unchanged for a century, to the ground. That is not wild-eyed hippie talk. It is the assessment of the utilities themselves.

Back in January, the Edison Electric Institute — the (typically stodgy and backward-looking) trade group of U.S. investor-owned utilities — released a report [PDF] that, as far as I can tell, went almost entirely without notice in the press. That’s a shame. It is one of the most prescient and brutally frank things I’ve ever read about the power sector. It is a rare thing to hear an industry tell the tale of its own incipient obsolescence.

...

Did you follow that? As ratepayers opt for solar panels (and other distributed energy resources like micro-turbines, batteries, smart appliances, etc.), it raises costs on other ratepayers and hurts the utility’s credit rating. As rates rise on other ratepayers, the attractiveness of solar increases, so more opt for it. Thus costs on remaining ratepayers are even further increased, the utility’s credit even further damaged. It’s a vicious, self-reinforcing cycle:

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So what’s to be done? You won’t be surprised to hear that EEI’s prescription is mainly focused on preserving utilities and their familiar business model. But is that the best thing for electricity consumers? Is that the best thing for the climate?

[Recursion]

1. Sounds good to me! (nt)

[closeupready]

2. Of course. Not a surprise. This is partially why we are NOT

more solar. We put a man on the moon, but could not transition to cleaner, renewable energy? Yeah, right.

[Jeff In Milwaukee]

3. My opinion?

[kenfrequed]

4. Too true.

And as the author pointed out, the free market is not the best way to organize innovation. It squelches that which interferes with the bottom line or demands ridiculous incentives to stay competetive.

[Autumn]

5. I'm on board with that.

rec

[bluedigger]

6. It's not like they have a divine right to exist.

Maybe we should still be subsidizing buggy whip manufacturers, too, so they can still do what they do.

[Spike89]

9. Agreed, but buggy whips were needed for a while

The first practical cars killed the future of the buggy whip industry, but there was a transition. Not many people outside the rich could afford a car for the first few decades of the automobile. Today, not everyone outside maybe the top 10% can even consider going off the grid--startup costs for solar are still somewhat expensive for most homeowners and just not practical for most landlords.

The poor needed buggy whips for a while--they'll need affordable power off the grid for a while too. Dropping subsidies too soon only hurts the poor.

[bluedigger]

13. I'm just speaking to the general trend of obsolescent industries.

No need to extrapolate implementing actual policy into it. The point is that change happens, over time.

[Spike89]

7. They are right...transitions are almost always messy

Some industries suffer as new technologies move in to replace them. We'll see a very similar dynamic if/when plug-in cars (or another non-IC technology) actually approach parity in numbers with gasoline-powered cars. The tipping point will be when the new technology not only surpasses the existing, but when the new technology appears "mature".

The maturity level of a new technology isn't absolutely critical if it is measurably better than the one it replaces, but the volatile it seems, the more it encourages people to wait. For instance, if solar panels drop in price 50% and increase in efficiency 10% in a year, that is very volatile and can actually negatively slow adoption. As an example, people will know an early adopter that paid $20K for a system that cuts their utility bill by 50% and they will probably know someone that bought the "new" panels that cost $10,000 and cut the bill 60%. They may know that the current systems pay for themselves in 5-6 years, but they also know/suspect that if they wait another year they could get a system for $5,000 that will pay for itself in a year or two.

It will happen. It is pretty much inevitable that as smaller, site-based power systems (solar, fuel cell, wind, geothermal, etc.) become more efficient, affordable, and practical--the regional generators will lose their advantage in economy of scale. They almost certainly won't disappear in the near future--there are too many high power consumers (factories, high-rise apartments, etc.) that will require more juice than they can affordably generate on site. However, the price for such power will spike upwards.

Anyone expecting power so cheap it isn't even metered are going to be as disappointed as the people in the 1950s who were promised that nuclear power would deliver the same thing. The costs will shift, expectations will change, and it will probably be better, but it isn't likely we'll see a utopian free-power situation in our lifetimes.

[LWolf]

8. We can't let that happen. nt

[onestepforward]

10. Smart companies would have had a better plan:

"Solar power and other distributed renewable energy technologies could lay waste to U.S. power utilities and burn the utility business model, which has remained virtually unchanged for a century, to the ground."

Success involves change and flexibility. Their current plan is dependent upon things staying the same ie: citizens staying ignorant about climate change, pollution, etc.

Nothing stays the same, thank goodness.

[Scuba]

11. Smart companies do have a better plan ...

http://www.democraticunderground.com/10022983998

[onestepforward]

12. I just read that!

Yes, a much smarter plan!

[gollygee]

14. That's the whole point

We don't live to serve corporations. They exist to sell us what we need. If we don't need what they have to sell, they'll have to adjust and sell something else. We don't readjust our life to meet their desire to remain the same. That's totally backward.