How Utilities Can Embrace Solar Energy

There has never been a greater threat to the utility industry than solar energy. It allows for the transfer of power-generating assets from the utility to consumers, stretches the grid by making homes both demand sources and power suppliers, and may even allow consumers to cut ties to the grid altogether.

One key component challenging utilities is energy storage, because solar energy is an intermittent power source. It can be a threat to their business model if homeowners and businesses install storage to reduce their reliance on the grid. But it could also be a boon to utilities if they can make energy storage their new revenue-generating asset. That’s exactly what we think will happen long-term, and it could be good for everyone involved.

The Solar Challenge

To understand why energy storage is a big deal for utilities, you have to understand how utilities see an individual solar home. In the image below, I’ve shown an example supply-and-demand chart for a solar home. In the example, the home uses 2 kWh of energy 24 hours per day and has a 5 kW solar power system that provides varying levels of energy throughout the day.


In this example, the home requires no net power from the utility. Sometimes it’s coming from a consumer, sometimes it’s coming from a supplier, but at the end of the day the solar power system provided exactly enough energy to power the home’s need. If this home were in a location where net metering is allowed (which is most of the U.S.), the electricity bill for this day would be $0.

You can see why utilities might not like this setup. They’re providing a service to this household by providing energy at night and taking energy during the day, but getting nothing for it. So, utilities have started pushing back against net metering and begun proposing charges for solar households.

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Marlissa Hudson

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