For the past year, Morgan Stanley, Goldman Sachs and other market analysts have warned that solar-electric panels, coupled with improved electricity-storage systems such as Tesla’s home battery (Trends Journal, Winter 2015) threaten electric utilities’ business model. In 2014, an analysis by investment bank UBS stated, “…the ‘we have done it like this for a century’ value chain in developed electricity markets will be turned upside down within the next 10–20 years, driven by solar and batteries.”
Now, an April 2015 report from the nonpartisan, nonprofit Rocky Mountain Institute highlights another danger – and one that’s nearer – to the companies: Phantom customers.
These are the growing number of electric customers who remain connected to the grid — but only to have a source of backup power if their sun-driven systems break down. Utilities would incur costs of maintaining connections to these customers and keeping billing records, but would sell them too little power to make the service profitable or, perhaps, even to cover costs.
With the price of solar-powered, customer-sited electricity reaching parity with that of utility-generated power in ever more locations (Trends Journal, Winter 2014), this could happen more quickly than many have expected.
TREND FORECAST: These home systems could sell power back to the grid, balancing the grid’s load demands, reducing utilities’ need to generate their own power, and eliminating demands for new power plants. Banks and investment firms are urging electric companies to embrace this new model. But there’s growing resistance from major utility companies in the US, Asia and central Europe to reverse the trend. Their rotting infrastructures struggle to keep pace with demand, and the more consumers go green, the more money they lose.
