Are the Electric Utilities the Enemy of the Solar Energy Industry?

There are over 3,000 utilities operating in the U.S.; they are investor-owned, public-owned, cooperatives (owned by the customers served) or municipal-owned, each with their own set of unique operating regulations. All electric utilities are playing by rules set up over the last hundred years and have made large, billion dollar investments in generation, transmission, distribution and operational assets in response to these regulations.

Senior management of many electric utilities find themselves with their heads in a vise these last few years.

Solar energy & the utilities

Can't we all just get along?

Demonized for contributing to global warming, vilified for fighting renewable energy market support mechanisms, and generally disparaged for not being green enough, the utilities have made previous large infrastructure investments with long payback timelines, and are waiting for guidance from the federal government on a multitude of issues including putting a price on carbon dioxide. Before investing any further capital into new generation assets, brown fuel, nuclear, renewables or otherwise, they are rightly waiting on legislators to act. (Capitol Hill continues to dither on a comprehensive climate and energy bill, which includes a price on C02)

This is not to say that utilities don’t bring most of the bad PR on themselves. Their constant campaigns of misinformation regarding the cost of transitioning to clean generation, and application of their large lobbying forces against clean energy legislation of any flavor, positions them as the bad guys. But, in most cases, they do this because they have a business to protect and financial obligations that are long-term.

There are a few progressive utilities that are embracing renewables and especially solar photovoltaics. A sampling from last year’s top 10 utilities in solar includes Excel Energy, PS&G, PSE&G, Salt River Project, Sempra Energy, and Southern California Edison.

While many in the solar energy industry present utilities as the enemy (everyone needs a villain to make a marketing story interesting!), this approach serves no one and only makes for larger, higher walls to be built between the utilities and clean energy providers. Clearly there need to be other ways to bring all parties together so that mature, currently available solar energy and other clean energy products can be rapidly deployed.

solar energy & PSE&GThere are luminaries–unlikely players who are leading the way. A good example is a recent article, “Greening  Our Energy Future” by Mr. Ralph Izzo, Chairman, President & CEO of electric utility PSE&G in New Jersey. Mr. Izzo proposes that utilities have an indispensable role to “bring the benefits of the green economy to farmers, homeowners, renters, business people, the residents of our cities, suburbs and towns – everyone.” He puts forward that the electric utilities need to re-think their role in fostering the green energy revolution, as they are uniquely placed in the market structure to facilitate and drive energy efficiency and clean energy to all constituents that rely on the grid. And he has placed his company at the forefront with strong and growing energy efficiency and solar energy programs.

This is the kind of progressiveness and forethought we need in both camps. But, as Mr. Izzo points out, we also need ACTION by the federal government to change existing regulations so that utilities can monetize their investments in green energy programs. And the solar energy industry needs ACTION by the federal government on placing a price on a unit of C02, among other market driven inducements, so that the kWh cost of the energy playing field is level.

In my opinion the electric utilities are not the enemy of the solar energy industry. The utilities have the ability to be strong partners in rolling out green energy programs with the energy efficiency and renewable energy industries. The real enemy at the moment is the lack of leadership by our elected officials to produce new regulations that would allow for this kind of clean energy partnership.

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