With less than one percent of the nation’s electricity being generated by solar energy sources, you would think that the big utility companies have nothing to worry about. But at the Edison Electric Institute’s annual convention recently, a lobbyist from the Electric Power Research Institute said that renewable sources of electricity were threatening to disrupt the entire industry.
The problem it seems is not that the current supply of energy on the power grid is less than one percent renewables; the problem is that the percentage is growing. While utility companies are required to maintain their transmission lines and the related infrastructure, more of their customer base is turning to renewables and paying less to the utility company. Not only that, but in many states the utilities are required by law to purchase excess power generated by those customers. So, they are faced with less revenue coming in and higher expenses flowing out.
To be fair, not every utility company is complaining about the high cost of paying for solar-generated power from residential customers. Many of the municipal and publicly owned utility companies see the increase in renewable sources of electricity as a positive thing. After all, public support for renewable energy is at an all-time high. However, the for-profit utility companies who answer to shareholders have a different view.
Although publicly the big investor-owned utilities support the idea of solar energy, privately they are fighting against legislation that subsidizes renewables. Last year, attempts were made in more than a dozen states to weaken or repeal renewable standards. It is the utilities assertion that continuing to incentivize the purchase of solar panels will create an even larger drain on their revenue stream. They predict that a so-called “death spiral” will occur in which electricity costs will need to rise in order to maintain the necessary income, forcing even more customers to turn to solar power.
But there is a solution to this disruptive force in place. Many of the smaller and more adaptable utility companies are embracing solar power and reaping the benefits of subsidies and incentives themselves. CPS Energy in San Antonio is the largest municipally owned electric and gas utility in the country. They are also the leading solar energy producer in Texas. Part of the reason for this is the extremely generous rebate program in that state for solar energy installations.
At Choose Energy, we believe anything that reduces the cost of electricity for rate-payers who want cheap electricity should be supported. If the big shareholder-owned utilities would take advantage of the benefits of solar power generation rather than digging in their heels, we would probably see rates fall across the board. We also feel that using solar and other renewable sources for power generation is better for the environment and for our continued energy reliability. We want to hear from you. What do you think of the increase in renewable power generation by utilities?