Meet the Solar Grid Decision Makers

Smaller scale renewable energy gives one-fifth of new power plant capacity every quarter in the past five years. One in 5 new California customers include energy storage to their solar arrays.

Economic defection takes place when electricity customers create a majority of their own electricity and has become cost-effective. The power to shift the electric grid’s future has shifted.

Consequences of the Shift of Power;

1. Traditional power plants are transforming into being financially inferior to solar energy competitors.

2. Electricity sales have stalled since customers are creating more electricity for themselves.

3. Communities are reaping an increase of economic rewards from power generation, as electric customers, individually and collectively, create more locally.

Most utilities didn’t plan ahead for this shift of power. Some suggested new gas-powered generation that probably won’t remain online through the end of its economic life due to competition from solar-plus-storage.

In addition, utilities made reactionary moves to handle shifts at this level. There’s been a few utility responses to these changes:

1. Utilities damaged their images by resisting customer interest in distributed energy resources. They’ve burt their images by sending lobbyists to dampen policies that reward customer-sited and customer-owned power generation.

2. Utility investments in power purchases doesn’t decrease electricity costs for end users.

3. Utilities deployed utility-owned distributed renewable energy sources, but doesn’t influence overall benefit from end users.

Electricity market policies should coordinate fair compensation for distributed energy resources and market participants where technology is already competing. Altering utility oversight and electricity markets to transition from the dying utility distribution to democratic energy system where customers can choose distributed energy choices.

Enters the Market

In 2016, storage-driven transformation of the electricity business came from Hawaii. A combination solar-plus-battery with a price of 19 cents per kWh, almost 50% cheaper than network electricity was given to the state. Due to its instance and success, 1 in 5 new residential solar customers in California how choose to add storage.

Based on a measure of electricity prices, on-site solar and energy storage compete with the price of servicing almost 26 million residential electricity customers in 19 states. According to McKinsey, within three years an Arizona electric customer could service about 90% of their electricity needs with solar and battery storage.

This is much lower in price than by purchasing electricity from the utility. Storage costs have decreased significantly. It’s measured in the price of energy averaged over the expected life of the battery. Customers have responded to this by a surge of new installations of residential energy storage.

Business customers overseeing bigger facilities have an even bigger advantage. A 2017 analysis of solar and storage for cheaper housing in Chicago found that including renewable energy storage reduces the payback from 20 years to 6 years just by helping facility demand charges.

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