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Utilities vs. Solar Consumers: Who’s Got the Power?

Utilities vs. Solar Consumers: Who’s Got the Power?

A new white paper from the Institute for Local Self-Reliance reflects on how Solar Plus Storage technology is disrupting the traditional power balance of energy supply and demand. Titled “How Solar+Batteries Shift Electric Grid Decision Making from Utilities to Consumers,” it examines the fundamental shift that is occurring as more consumers elect to produce and use power locally. But are utility companies ready to acknowledge that the future of solar plus storage is here?

Rapid Technology Adoption Spurs Change

The paper’s author, John Farrell, notes that “For 100 years, most decisions about the U.S. electric grid have been made at the top by electric utilities, public regulators, and grid operators. That era has ended.” Why?

The rapid consumer adoption of solar plus storage systems has created new, localized models of power production and consumption. Farrell calls this “economic defection” - the ability for power customers to become independent power generators has changed their relationship to utility companies. Because grid-connected solar plus storage systems are still very common, the shared infrastructure still binds solar adopters to the traditional utility companies, but perhaps not for long.

These localized power generation, storage, and distribution systems have already provided the impetus for reflection on the future of the electric grid and what must be done to prepare infrastructure for decentralized energy production. The fact is, distributed generation is a more reliable, more flexible, and cheaper alternative to paying continually rising utility rates to buy and transport energy from far off power plants. As prices for solar and battery technology continue to decline, more and more consumers are feeling empowered to make the switch.

“Based on a proxy measure of electricity prices, the combination of on-site solar and energy storage can already compete with the price of serving nearly 26 million residential electricity customers in 19 states,” Farrell notes. How have utility companies responded?

Utilities Do Too Little, Too Late

The first attempt by utilities to address the rising popularity of solar (and later, solar plus storage) technology was to block it by making it less economically beneficial to consumers. We saw this with attempts to end net metering (which allowed consumers to be reimbursed for extra power they produced and shared), the levying of special fees on the accounts of solar consumers, and raising fixed portions of bills. Luckily, the arrival of low-cost energy storage options has allowed many consumers to still experience the financial benefits of producing their own power.

Another strategy has been adopting utility-scale solar efforts, which allows utilities to dodge environmental arguments and continue making money off of consumers by withholding their share of reduced costs. Additionally, “some utilities go beyond utility-owned large-scale clean energy facilities to embrace utility-owned distributed solar and storage.”This keeps as much as two-thirds of the profits from clean energy inside the company.

Consumers know better, however. The democratization of power production enabled by solar plus storage technology has proven that consumers want to be able to choose how and where they get their power. As utility companies continue to drag their heels, solar plus storage adopters are outpacing them and making the case for a different kind of energy future.

Cutting the Cord

Will utilities realize that major spending on outdated technologies is regressive and focus their grid modernization efforts on a more local, sustainable model? That remains to be seen. In the meantime, more and more consumers are choosing to cut the cord, embrace solar plus storage, and benefit from the financial savings that come from clean power investments.

Are you ready to cut the cord? Solar plus storage technology is more efficient and more affordable than ever. If you’d like to be part of the movement towards sustainable, stable, and economically beneficial power production, contact us today!


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