PG&E Wildfire Policies Provide Opportunities For Tesla, Sunrun, & Others

So your electric company sends you a note that says, “Oh, by the way. We may shut off your power for up to 5 days this summer to reduce the risk of wildfires.” What do you do? For many Pacific Gas & Electric customers in northern California, that is not a rhetorical question.

BT496N 2009 Wildfire in Yosemite National Park

The company has declared bankruptcy after a number of deadly wildfires last year were attributed to its powerlines. It could be on the hook for up to $30 billion in damages as a result. According to the Wall Street Journal, to avoid similar catastrophes this year, it has begun notifying customers in high risk areas that they may be without electricity for as many as 5 days or more this year when the risk of wildfires is high.

In all, more than 5 million customers could be affected. PG&E has already disconnected some customers this year. In June, it pulled the plug on a great number of customers during a high forest fire alert put out by the National Weather Service.

All this talk of outages has stirred interest in rooftop solar and behind the meter energy storage products from companies like Tesla and Sunrun. Lynn Jurich, CEO of Sunrun, says she expects an uptick in business as a result of the announcement by PG&E that it plans to disconnect parts of its grid this summer. “It’s going to be a very good long term tailwind for the business,” she says.

Tesla also is seeing an increase in interest in its Powerwall residential storage battery with built in inverter. One advantage of the Tesla system is that it can go into “island” mode during a power outage, which means it disconnects from the grid while providing backup power to the home. Many people with conventional rooftop solar systems are surprised to learn they are of no use during a power outage because they may feed electricity back into the electrical grid, putting repair personnel at risk.

Bloom Energy provides always-on power for commercial customers like Google and Adobe using fuel cells powered by natural gas. Those systems are only available where natural gas pipelines are installed and are likely too expensive for most individual homeowners. Bloom’s CEO, KR Sridhar, tells the WSJ, “We have never dealt with the paradigm of days’ worth of power outages.”

Sunrun, Tesla, and Bloom Energy are all encouraging the state’s PUC to expand incentives to homeowners and businesses who install their own electricity generating systems. PG&E has supported the company’s in their requests “to help address California’s most pressing issue — wildfire resiliency”.

PG&E is not alone in its struggles with wildfires. San Diego Gas & Electric and Southern California Edison have also notified customers that electrical service may be curtailed for up to 5 days during the coming wildfire season. Bloom Energy has the following message on its website, “How would you keep your business running if you had no electricity for five days or more? That’s a question every California business leader should be thinking about.”

While wildfires are the focus today at the start of yet another wildfire season, there is a larger message here. Traditional electrical grids are 100 year old technology. Microgrids that distribute locally produced electricity solve many of the resiliency issues that conventional grid operators need to deal with on a daily basis. More 21st century thinking is needed if renewable energy is to thrive and grow.