Solar & Utilities Can Exist Together, Says Musk

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Originally published on Solar Love.

Elon Musk believes solar and utilities can exist together, despite uneasy feelings among many within the utility sector.

Speaking at the Detroit Auto Show, Musk said that expanding electric vehicle markets, along with businesses and homes as solar power generators, will change how we view electricity demand.

“As we transition to electric transport, we’re going to see a significant increase in the demand for electricity,” SolarCity’s chair and Tesla’s CEO said, hinting that utilities will have a good future.

Musk told the Detroit press conference that he sees future electricity demand doubling. Half of supply would come from solar while half would come from the current utility, while the demand from current utilities would remain more or less unchanged.

In 2015, the US Energy Information Administration predicts large-scale generators will create less electricity than in 2007, even with steady economic improvement. Along with declining solar costs, it’s understandable why consumers may want to go off grid.

With solar’s rise, many US utilities have raised concerns of possible declining market share and increased grid maintenance costs. Interest groups have worked hard to disrupt solar’s momentum, including lobbying for solar tariffs. Utilities argue this helps keep up the current grid, and not pass costs on to normal, customers. Solar advocates would argue these “taxes” discourage consumer from going solar, and fail to note or value several benefits to the grid and society that come from distributed solar power. Unfortunately, some states have taken regressive action. Oklahoma signed a bill last spring allowing state utilities to charge higher rates for solar rooftop owners, compared to normal customers.

Disruptive technologies, like solar power, are now making utilities think how their business model can work in the 21st century. This same situation occurred when the Internet disrupted other sectors (including music and print media).

Utilities now face some unique challenges, including climate change, but they can take advantage of solutions like electric vehicles in order to survive.

Lyndon Rive, the CEO of SolarCity, told The Financial Times that it’s critical to have a grid, and that people misperceive what they are attempting to do at SolarCity.

“When you’ve had a monopoly for a hundred years, and you’ve never seen change, change may seem like death to you,” Rive said, suggesting utilities are seeing a “change spiral” now within this sector.

Utilities will have to change, to meet the growing demand for sustainable energy alternatives from customers. At the same time, Musk’s (and Rive’s) view is that utilities and solar companies co-existing is not out of line.

The question is, are utilities now willing to meet the rapidly changing energy landscape?

Photo Credit: Steve Jurvetson via WikiCommons (CC BY-SA 2.0 License)

Reprinted with permission.

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Adam Johnston

is expected to complete the Professional Development Certificate in Renewable Energy from the University of Toronto by December 2017. Adam recently completed his Social Media Certificate from Algonquin College Continuing & Online Learning. Adam also graduated from the University of Winnipeg with a three-year B.A. combined major in Economics and Rhetoric, Writing & Communications in 2011. Adam owns a part-time tax preparation business. He also recently started up Salay Consulting and Social Media services, a part-time business which provides cleantech writing, analysis, and social media services. His eventual goal is to be a cleantech policy analyst. You can follow him on Twitter @adamjohnstonwpg or check out his business

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8 thoughts on “Solar & Utilities Can Exist Together, Says Musk

  • Instead of “normal” customers. How about calling them “legacy” customers. Hopefully solar customers will be the new “normal”.

  • Elon Musk is very diplomatic
    can gascars exist next to EVs. dont think so
    can coal fired steam locomotives exist next to high speed electric trains. dont think so.
    can coal fired steam generating utilities exist next to Solar and Wind Turbine generating electricity. dont think so.
    does Elon Musk know better?
    do think so.
    but Elon Musk is smart and dont say so.
    for the short time being for old timer steam utilities.

    • The bottom line is that solar isn’t the best choice to meet all our energy needs. So calling out solar and saying that it will make half of future demand is very bold on it’s own…as that’s the same as saying it will make 100% of what we use today. I’m personally just blown away as to why utilities are moving to solar faster than you can say “plug in that EV”…but maybe I’m missing something. Minimal operating costs, fixed capital investment, predictable payout, Green Press…

      • I’m guessing solar will be 30% to 40%.

        30% because solar production coincides with highest demand. 10% stored for the late afternoon/evening peak. Perhaps 50% is some sunny places and perhaps under 30% in foggy places with lots of hydro.

        I’m guessing wind will capture a somewhat larger share because the wind blows more hours.

        I suspect utilities are moving rapidly to solar because it performs when they have to spend most for power. A solar PPA can mean that, if you’re a merit order utility, you can greatly lower settle prices on sunny days. If you’re selling what you own then you can save yourself a bundle on NG purchases.

    • Utilities do two main distinct things right now:
      – Generation
      – Distribution

      Mostly or only generation is threatened by customer-owned PV, and in particular old-school inflexible plants, commonly coal and nuclear.

      For distribution and other services (smart grid, energy management, etc), PV and other emerging tech (PEVs, ice-storage AC, etc) open new opportunities.

      Concrete examples: I have enough PV to produce more electricity than my family uses, but this only works because I can use the grid as “storage” and backup, so this service is obviously quite valuable to me.

      I also have a large dispatchable load, an EV. I’d love to give my utility some control over its charging schedule, if it helps leverage more renewables (e.g. delay charging when wind is forecast to peak up later that night) and/or bring costs down.

  • Elon Musk knows the Utility Companies are more than ready to “Shoot the messenger”. Hang in there Elon, economics says you will be the ultimate winner. As for the Utility Companies, if they can’t/won’t change then they need to go the way of Radio Shack

    • He also knows that he’s the media’s golden child and shooting him would only make utilities look worse.

    • I think Radio Shack is an odd example… Just what could they have changed into to survive? Brick and mortar electronics stores simply don’t have enough business to continue on any large scale as online sales grow, so we lost Circuit City, Radio Shack, and now Best Buy may be next. So I guess Radio Shack could have maybe closed its stores and started selling exclusively online, but even if they’d tried that I think Amazon would have killed them like they’ve killed most other competitors in the electronics category.

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