How should utilities view solar?

Solar energy is growing rapidly in the United States. Due to its very nature, solar expansion will dramatically transform the face of the energy market in this country. As such, the energy suppliers in the US have to start making adjustments. So how should utilities view solar?

How many energy suppliers in the US currently use solar power?

Fear of change

Many energy suppliers in the US currently dread the idea of solar power taking over energy in the country. This is mostly due to strong ties that many of them have with the fossil fuel industry, which stands to lose the most to solar power.

Many energy suppliers are taking steps to actively fight against the spread of solar power. Much of the fight has been political, with some energy suppliers in the US taking shots at solar in the press whenever they get the chance and many others actively lobbying to have solar legally suppressed.

Some energy suppliers are even actively punishing their customers for using solar power. Wisconsin’s Madison Gas & Electric (a strong supporter of solar power until it started hurting their profits), for instance, is actively punishing their customers for using solar power.

How all energy suppliers in the US should view solar power

Cheap energy for the grid

Sometimes a solar powered home produces much more energy than it actually needs. Fortunately, this energy does not have to go to waste. Energy suppliers in the US can pay solar homeowners to send their excess solar power back into the power grid, strengthening the reliability of the energy suppliers’ services and the cost effectiveness of their energy production.

There are many systems that energy suppliers can use to optimize these customer to business (C2B) solar transactions. The five most prevalent systems for valuing solar power are as follows:

1. Basic Net Energy Metering (NEM)

NEM is the most commonly known type of C2B solar transaction. In essence, energy suppliers would pay the retail value of the electricity to the customers. It is extremely popular due to its simplicity and ease of implementation.

2. Retaining NEM and adding a fixed rate for lost revenue

This solution would obviously be less popular with solar energy customers, but it is something that energy suppliers are seeing as an opportunity nonetheless.

3. Retaining NEM and adding a dollars per kilowatt charge for solar customers

As another solution that is less than popular with solar customers that is also designed to make up for lost revenues.

4. Reciprocal value

This involves paying solar power customers the full retail value for their solar energy while charging them the same amount as any other utility customer for the energy that they use from the power grid.

5. Transactive energy services

This is by far the most complicated way to value solar power produced by customers. It involves combining economic, algorithmic and engineering techniques to predict energy cost and demand, and determine what the proper reaction should be for the distribution, storage, etc of solar power.

Community solar projects

Despite its rapidly dropping cost, most people cannot afford to have solar panels installed into their homes; it is simply not a feasible solution for others due to location issues. Utilities can take advantage of this by installing community solar panel systems in areas where people are unable to have individual systems installed. Doing this would allow them to essentially corner the solar market in these areas.

Positioning to reap benefits from solar power homes

Energy suppliers can also benefit from solar by actively helping more of their customers get solar panel systems installed in their homes and businesses. Energy suppliers in CT, for instance, are aiding customers with finding solutions to get solar panel systems installed. By doing this, they are putting themselves in a position to get the most out of the renewable energy credits that solar panel owners create.

Solar power is happening, and utility companies should embrace this change

There is nothing that energy companies in the US can do to stop solar. They can continue to actively slow its spread, but these efforts will only lead to their downfall. It is only the utility companies that work to become a part of the solar revolution that will survive in the long-term.