Why Your Utility Doesn’t Want You to Go Solar

Giving up control isn’t easy. That truth has never been more evident in our society than now. Big insurance and pharmaceutical companies are none too keen about giving up control of health care in the United States. The Taliban aren’t giving up control of Afghanistan so easily. And your utility company certainly isn’t pleased with the prospect of losing their century-old monopoly on electricity service.

Yet that very change is happening right under corporate America’s nose and there’s nothing they can do about it.

Photo Credit: lady_lbrty

Since the very inception of the electric grid utilities, they’ve monopolized how you get your electricity and how much you pay for it. To be fair, in the past, that was largely unavoidable, as the vast majority of power generation in the 20th century was centralized (derived from large-scale power plants). For a while, utilities thought they could ignore the idea of consumer-driven power, but then came the rise of solar power and some new rules governing how utilities get their energy.

The Appeal of Distributed Generation

Distributed generation (i.e. rooftop solar systems) throws a huge wrench into the status quo for America’s utilities. Not that your utility doesn’t want clean energy sources. They do. So long as that energy is centralized, controllable and marketable to consumers at a utility-set rate.

Renewable electricity standards, now adopted by more than 30 states, have forced utilities to harness a certain percentage of their power from renewable sources. At the same time, homeowners and business owners are lured by the prospect of free energy, a smaller environmental footprint, smaller electricity bills, the government incentives that make small-scale solar systems increasingly affordable and the chance to be part of a historical shift toward sustainable energy. 

A Centralized Failure?

Up to this point, utility attempts at large, centralized (concentrated) solar power plants have been pretty unimpressive. By comparison, the number of home rooftop solar systems is skyrocketing. According to Time magazine, in 2008, 33,500 rooftop solar systems were installed, a 63 percent increase over 2007. Plus, from 2006-2008, everyday consumers added 522 megawatts (mW) of solar power to the electric grid, while utilities added just 96 mW.

Photo Credit: faul

That adds up to a sizable head start for distributed generation over utility-favored concentrated solar power (CSP) plants. For obvious reasons, utilities are fairly nonplussed about that fact, the main reason for their frustration being that so many utility-scale plants are constantly mired in the permitting process as well as (or because of) environmental opposition.

A little help from the government and some new technology stand to facilitate faster adoption of large-scale solar power, but rooftop solar continues to grow all the time. Some utilities are beginning to work more overtly to discourage distributed generation (DG) solar power.

Utilities Getting Desperate

Historically, the federal government has a soft spot for funding CSP projects and research. So the big boys have that on their side. Yet that hasn’t stopped the rapid growth of small-scale solar power. So some utilities have started finding ways to fight the DG tide.

Recently, Xcel Energy of Colorado tried to implement a surcharge on homes and businesses using solar power. Unfortunately for Xcel, home and business owners went berserk and the proposal, which would have paid in part for Xcel’s new coal-fired plant, was promptly disposed of. Similarly, PNM, a New Mexico utility, has been pushing for the right to drastically reduce incentives for installation of solar systems by home and business owners. At the same time, PNM is fighting for the right to exclusively own solar panels hooked up to its grid. That’s like PG&E claiming ownership of your dishwasher because it’s plugged into your house. Um, hello?

In a victory for utilities, Southern California Edison killed a bill that would have allowed the city of Palm Desert to pay residents for extra solar power their systems generate. Not that the city needed extra sustainable power, right? Such is the ongoing fight between what you might call “Old Energy” utilities and “New Energy” distributed systems owned by utility customers.

The utilities need that energy to meet RES requirements. That’s why they reluctantly participate in incentivizing distributed energy, but also want to retain control over it as well. For the most part, these are for-profit companies – having to buy power from a million individual power producers within their grid will certainly bite into those profits.

The Band Plays On

The bandwagon is green. And utilities and consumers alike are part of it. Hundreds of large-scale solar projects are waiting to break ground. Meanwhile, thousands of small-scale energy projects already are. Obstacles exist for both: many homeowners must worry about initial costs, and most utilities face regulation, permitting, transmission and the environmental impact of hundreds of acres of solar panels on remote public lands.

The end result remains uncertain as the solar industry works to gain a solid foundation and define its identity. Based on its beginnings (and some practical predictions), that result will likely be a mixture of utility and consumer power production. Yet even that would mean an end to the monopoly that utilities have clinged to for the last 100 years – reason enough why your utility may not want you to go solar.

Posted on September 8th in Solar News by Dan.