A battle has been brewing between utility companies and the rooftop solar industry in California, and, of course, it’s about money. They compete with each other because rooftop solar systems enable people to purchase less power from utility companies, but the companies still have a leg to stand on — the fact is that the owners of these systems rely on them for backup.
Solar panels on top of a skyscraper.
Image via ssuaphotos/Shutterstock.
Energy storage systems are expected to increasingly come online due to declining battery costs, as well as energy storage mandates. As a result of this, utilities are losing control of the electricity market. Not too long ago, lithium-ion batteries cost a whopping $1 million per MWh of storage capacity, rendering them infeasible for cost-competitive grid storage, but now their cost has dipped well below $500,000 per MWh. This, combined with California’s energy storage mandate, is undoing the traditional utility business model, as the use of energy storage can eliminate the need for a grid connection altogether.
Unsurprisingly, utilities are fighting this transition to rooftop solar, and lately, energy storage has become a major part of that, as it is one of the biggest threats they face. Lyndon Rive, the CEO of SolarCity, recently commented at a CPUC panel discussion, stating: “It takes about eight months to connect. There is no reason for it. You can’t help but think that it’s slow because there is incentive to keep the game from changing.”
What other reason would they have for taking 8 months to plug in an energy storage system?
Perseverance Is Needed Now More Than Ever
Mankind has been progressing towards that tipping point where people can install their own energy storage systems with peace of mind. As energy storage systems go online, they get us closer to this goal because their performance will be monitored and everyone else can learn from that. Furthermore, scaling up production brings costs down, as we have seen very clearly with solar panels and wind turbines (as well as countless other technologies).
Although expensive, by introducing an energy storage mandate, California has taken an important step that will lead to the progression of a large-scale energy storage industry, and (if fast enough) a habitable planet for future generations. Utility power companies are sticking around, for now. However, they will have to change their business model soon in order to survive in the long term.
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