Electric Utilities Now Fighting Home Solar As Threat To Their Business

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Solar Panels by Flickr user Chandra Marsono

Solar Panels by Flickr user Chandra Marsono

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For owners of electric vehicles, powering their homes and cars using solar panels mounted on the roof are a win-win scenario.

Not only do they get to drive past every gas station, but home electricity bills are reduced or even eliminated.

That's great news for the end user, but not so much for the utility companies. Caught napping by rising demand for solar, the energy industry now wants to stem its spread before their own profits are harmed.

As The New York Times reports, the industry understands that rooftop solar is currently only a tiny proportion of all power being generated--less than a quarter of one percent.

However, they also know it'll rise in the coming years, aided by government incentives they feel will eventually threaten the existence of the industry.

Part of this is down to the system of net metering, which pays customers and businesses for excess energy they generate and sell back to utilities. In states where consumers are paid the wholesale price, this isn't a problem--but in states like California, with large incentives based on daytime retail rates, energy companies get the short straw.

As more customers move to rooftop solar systems, say energy companies, the discrepancy could result in huge amounts of lost revenue--up to $1.4 billion per year, according to California's top three utilities.

Should this shortfall be made up by charging non-solar customers extra (all 7.6 million of them, in this example), it could add $185 a year to people's bills.

Well, that's if the figures are correct--solar advocates cite studies suggesting the credit system can actually mean net savings for utilities. And Adam Browning from advocacy group Vote Solar told The New York Times, the current net metering system "is the only way for customers to get value for their rooftop solar systems" at the moment.

Then there are the benefits associated with moving power generation closer to where it's used--reducing load on the grid--and reducing the cost for utilities of maintaining a wide infrastructure and large generators.

The counter-argument? Customers who no longer pay for electricity no longer pay for upkeep of the current system--moving cost to other consumers. It's a situation which goes back to the root of the utility companies' problems: Customers fed up of paying extra for their electricity will likely move to solar themselves, accelerating rooftop solar use and leaving major utilities with fewer and fewer customers.

It could be a long time before such a situation occurs, but some utilities are already investing in home solar themselves to mitigate these future issues.

In the meantime, the main solar battleground is California, and many utilities there are still pushing for lower credit and participation figures for rooftop solar. It's a fight we can expect for some time to come--but ultimately, the customer themselves is winning in the short term: Competition leads to better service and lower prices...

Do you have a rooftop solar system on your home? Just how much are you saving over regular utility rates? Leave your comments below.

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