A revamped electric grid could yield huge cost savings, states a SolarCity study.
Reacting to the California-based study, SolarCity CEO Lyndon Rive said Californians could save $1.4 billion a year if modern technologies are better incorporated into the way electricity is stored and delivered.
Rive added if states revamp the utility business model to fit 21st century technology, they would find the argument rooftop solar harms the disadvantaged isn’t true.
“There is no cost shift,” he said in an LA Times article. “It’s a trade, and it’s a fair trade. It’s only a cost shift if the utility never values solar and the service that it provides.”
The 28-page report contends the current utility model works against consumer interests by encouraging utilities to build more power lines, substations and other parts of the electric grid. .
“Utilities have a fundamental financial incentive of ‘build more to profit more,’ which conflicts with the public interest of building and maintaining an affordable grid. This financial incentive model is a vestige of how utilities have always been regulated, a model originally constructed to encourage the expansion of electricity access.”
SolarCity has proposed creating an independent body which manages localized electricity generation, such as rooftop solar and battery storage. Utilities would manage and maintain the grid, generating revenue from providing distribution services rather than making money from building more.
Strained relations between utilities and solar industries have intensified, especially with solar power gaining traction in the residential and commercial marketplaces.
The California Public Utilities Commission has backed the solar industry in its January decision to continue a net metering policy of granting rooftop solar owners a dollar-for-dollar exchange for power they generate versus what they consume from utilities. Commissioners added some fees to the new rules they approved but largely left the key benefit of the compensation policy intact.
In reacting to the growth of solar distributed energy, utility companies have contended rooftop solar owners don’t pay a fair share for maintaining the electric grid, leaving those who can least afford it to cover grid system costs.
As reported by Utility DIVE, the design and operation of the new distributed power grid presents a major opportunity for partnering across the energy industry. Collaboration across utilities, grid operators, regulators, national laboratories, philanthropists, environmentalists, distributed energy resource providers, energy service providers and customers is paramount to meeting the challenge of modernizing the grid.
In modernizing the 21st century electrical grid SolarCity indicates it hopes to transition the electricity infrastructure to one using clean distributed energy resources that are proliferating across the industry.
Image: Electric network power lines via Shutterstock
Graphic via SolarCity