Solar PV — and Distributed Generation More Generally — Changes What We Expect from Our Utilities

The solar PV growth curves illustrate the rapid expansion in the deployment of this form for distributed generation (DG).  The only conclusion one can draw from looking at these graphs is that, after decades of customers’ putting their toes in the water, they’ve begun to take the plunge.  Solar has arrived as a mainstream force, dramatically reshaping the way we power our homes and businesses.

Per this report from the Rocky Mountain Institute:

Consider California. To date, about 150,000 distributed solar PV systems, totaling 1.5 GW, have been installed on homes and businesses in that state. Last year, U.S. utilities interconnected nearly 90,000 net-metered solar projects totaling almost 1.2 GW-ac, a 46-percent increase over 2011. In total, there are currently 3.5 GW of net-metered projects in the country, the capacity equivalent of 3.5 nuclear plants. This growth is due in part to third-party solar ownership and financing. SolarCity, the biggest player in that game, enjoyed 117-percent growth in installations from 2011 to 2012, and expects 2013 to be another 60 percent higher again than 2012.

But it’s complicated.  Just like the roads in Geneva and Boston were put in place long before the automobile was conceived, our grid was established purely so utilities could generate, transmit, and distribute electrical power to a customer who paid its cost, plus a reasonable, carefully measured profit.  DG throws a whole series of monkey wrenches into the works.

Now, a net-metering customer wants to generate enough energy on his own to create an electric bill of zero – yet he’s using the grid all day long to buy and sell power – without paying a nickel for it.

What’s more, DG provides a service in terms of load balancing.  Shouldn’t that value be recognized and compensated?

The reader will note that these are the types of issues that the folks at RMI eat for breakfast.

Not to give anything away, but they suggest that we need to rethink the way utilities operate.  That’s for sure.  In particular, we need a way to compensate all parties fairly, while providing incentive to send us in the right direction environmentally.  That’s a combination of reducing power consumption with efficiency and conservation, as well as replacing fossil fuel sources with renewables.