Utilities are striking back at rooftop solar by changing their billing structure. Changed industry conditions call for innovation, not impediments. We previously have written how it is a mistake to think utilities will disappear with the growth of distributed generation. Utility companies could be expected to respond to the challenges to their dominance with the growth of rooftop solar. However, their response to date could best be described as sneaky. In this short note we examine the current utility business model, how this model is being upset by rooftop solar, the rise of fixed charges in your bill, and evidence of this occurring in Australia (as well as overseas). (VIEW LINK)
Hi Nathan, no link in the wire?
Thanks James. Link is now up.
Great piece Nathan, glad you put it out there. The current strategy will encourage grid defection -- which is bad for utilities and society alike. And yet, all too many focus on trying to lobby for bad policy that will support short term profits. Recipe for stranded capital. Just look at what has happened to Origin Energy.
Thanks Claude. I just wanted to highlight the growing conflict between utilities and their customers but caution at projecting an acceleration in grid defections in the short term. Residential battery solutions are still too expensive except for all but the most expensive delivered electricity markets (think islands). I would focus on the marginal impact from rooftop solar on utility revenues. This will have far greater impact in the short and medium term. Solar is economic today without subsidy while this is not the case for storage.
Agreed, although I think that looking forward a few years or so the issue with grid defection will become very very real, especially with new dwellings. Keep in mind sometimes council charges more than the price of a battery to connect to the grid, especially for new builds in more regional areas.