Monday, September 28, 2015

Utilities looking to expedite their own death / irrelivance

Oh California utilities, whoa is thee.  This past Saturday saw this LA Times article hinting at the recent musings of California utilities on how to best preserve their antiquated business model through proposed changes to net metering and discussion of fixed monthly charges for customers with their own solar power systems.
In summary, utilities are proposing to cut the current net metering rate by 50%, and start charging a fixed per kW installed "tax" on solar customers.  This would be funny if it weren't so sad.  Instead of finding ways to truly change their business model towards what is very clearly going to be a clean energy driven, distributed generation future, they are moving to try and "preserve" their comfort with centralized generation using fossil fuels, under the guise of "solar power adopting customers are not paying their fair share of grid upkeep costs." Whaan Whaan Whaa.

Well, while utilities may have the "power" to do this today, it hardly seems like a good long term solution.  In fact, since they are basically offering to pay over generators of solar energy a fraction of the market value of their electricity, generators will be well suited to look for other means of monetization for excess generation, such as home based / community based energy storage.

Need I remind people that the hottest product announcement of the year was the home battery storage system from Tesla.  Now imagine the interest in such a product when you find out that your utility in basically insentivizing you through fees to integrate your own storage.  How are they incentivizing?

Lets do a little math:

Lets say I have a 5kW system, generating for 6hrs a day, or 30kWh. During the day I push 20kWh back to the grid, where I used to get fair credit (say $0.18/kWh). Now my utility wants to charge me $10 / month and only credit me $0.09/kWh. Well, looks like I'll have an extra $558 / yr incentive towards my own home battery storage system.

Has there ever been an example of an industry so blatantly signing its own death warrant?

While I have a little sentiment for the position utilities are finding themselves in, it is just that.. a little sentiment.  These are big, powerful organizations who have unlimited resources at their disposal to find another way to exist in the new world order.  While we should be seeing movements on par with "Nextflix moving from DVDs in the mail to streaming" level adjustment in utility business plans, we are instead seeing completely non-creative, totally expected moves to try and "tax and fee" their antiquated business plans back into relevance.

Its not going to work.  The sooner we ALL realized that, the sooner we can work on building the RIGHT system of clean, distributed energy for all.

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