The age of renewables is all about change, not only in the way we generate electricity but also the way we live and function. The acceptance of alternative-energy sources has affected how we view the environment, drive our cars and run our households. In no small way, it likely will change the way utilities relate to their customers.


One dynamic that will affect that relationship is the growth of solar panels plus batteries. An April study by the Snowmass, Colo.-based Rocky Mountain Institute highlights the benefits this technological pairing will give to users and the choices it will present to utilities.


Co-authored with smart-grid software provider HOMER Energy, “The Economics of Load Defection” asserts that grid-connected solar-plus-battery systems could supply the majority of customers’ electricity needs that the grid has supplied to this point.


According to the study, as retail prices for grid electricity climb and costs for solar photovoltaic and batteries continue to decline, grid-connected systems with these two technologies will present an increasingly cost-effective option for customers in the next 10–15 years.


What is beneficial to customers may not be as favorable to utilities. Even if only a fraction of customers adopt combined solar-battery systems, utilities could face lost kilowatt-hour sales from central generation. For example, the study notes that maximum residential and commercial load defection in the Northeast United States could total 140 million megawatt-hours and $35 billion per year by 2030.


On the other hand, the study also says that it is not all bad news for utilities. Co-author RMI manager Leia Guccione described the future scenario as “not all risk,” because the solar-plus-battery systems are grid-connected, and they can offer services back to the grid.


“We need not see them only as a threat,” she said.


The impact of solar-plus-battery systems on utilities is ultimately up to the utilities. If utilities learn to adjust to the changing technology, it could be a win-win for them and their customers.


According to Jules Kortenhorst, CEO of Rocky Mountain Institute, “Today’s electricity system is at a metaphorical fork in the road.” 


If utilities hold onto obsolete methods of pricing, they will only succeed in encouraging more customers to go offline. However, if they adjust to the changes and price accordingly, they will have successfully created the grid of the future, one that is “transactive, with lower systemwide costs, and that empowers customers with choice,” Kortenhorst said.


For more information on this study, see Alternative Energy on page 70.