January 5, 2015

Solar Is Changing the Game

At the start of 2015, solar energy is booming. It’s been a long time coming, but financial incentives for renewables along with more affordable panels are finally having a notable impact in states like California.

By Sheril Kirshenbaum

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This article was published in Scientific American’s former blog network and reflects the views of the author, not necessarily those of Scientific American

At the start of 2015, solar energy is booming. It's been a long time coming, but financial incentives for renewables along with more affordable panels are finally having a notable impact in states like California.

I'm not surprised. When I moved to Monterey in 2013, I met Solar City reps on my first trip to Home Depot. They clearly and concisely explained the benefits of adding solar panels to our roof and even sent a sales person to meet with us in our home to discuss what we could save. Ultimately, we didn't add panels because we knew we would be moving again soon, but their reps made a very convincing case. And during our nine month residency, many neighbors made the change. California now accounts for a quarter of all the rooftop solar systems in the U.S. and the state's utility companies are getting nervous.

Here's why -

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When you install solar panels on your home, state laws require utility companies to pay you for the power that goes back onto the electric grid. With so many residents warming up to this technology, electricity bills are going down, so customers are paying less. The utilities need to make up lost revenue, but it's complicated.

Companies like PG&E are interested in raising rates with a monthly charge to cut losses, but this would likely encourage more customers to add solar panels. So an added fee would not be a long-term solution for utilities. So this cycle - or "death spiral" according to NPR - continues. Further, it's not just happening in California, but expanding to other regions of the nation as well. (Although I don't expect utility companies in my new state of residence - Michigan - to be very concerned about solar competition anytime soon.)

What happens over the coming decades? I suspect utility companies will have to change their business model--because solar is changing the game.

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