Category: Residential Generation
Much has been made of the so-called Utility Death Spiral – where on-site generation reduces or even eliminates the revenue opportunities for utilities, causing them to charge more per kilowatt-hour, spurring more on-site generation and so on until the utility goes out of business. Public responses to the concept have ranged from, “yes, it’s a serious threat” to, “it’s just utilities trying to scare people away from renewables.” But when solar PV and battery systems are deployed at sites inherently expensive for utilities to service, such as the end of distribution lines where voltage tends to sag, they can effectively reduce utility costs of service by removing loads that cost more to serve than the regulated rate the utility can charge. In its simplest form, this concept has been used by rural electric co-ops and public utility districts to service customers too remote for a power line extension. More sophisticated models can be used to reduce the cost of service for a variety of challenging situations – especially with the new grid support functions mandated by policies like California’s Rule 21 and the latest updates to IEEE 1547 being deployed in many inverters as well as the power of solar financing structures. Consumers, utilities, the clean energy industry and policy makers alike need to understand the opportunities for reducing utility costs so that they can come together to create the tools necessary to find and deploy the right solutions in the right places.
Paul Dailey– Director, Product & Market Strategy, OutBack Power Technologies