Are You a ‘Friendly’ or an ‘Unfriendly’?

The International Energy Agency predicts the global solar market will grow more than 10 percent annually until 2021. Solar is the fastest-growing energy source in the U.S., according to the Solar Energy Industries Association (SEIA). SEIA’s “U.S. Solar Market Insight 2012 Year in Review” states the U.S. installed 3,313 MW of solar photovoltaics in 2012-an industry record. California became the first state to install more than 1,000 MW in a year, according to SEIA, with growth across all market segments: residential, commercial and industrial and utility-scale solar. More than half of 2012 solar installations represented large utility-scale projects, but more home and small business owners are taking advantage of solar panels’ falling prices and installing small-scale solar at a record rate, according to the report. The report reveals nearly 83,000 California homes were fitted with solar panels in 2012 for 488 MW. A San Diego Gas & Electric (SDG&E) employee said that on average, 400 SDG&E customers installed solar panels each month during 2012. That average grew to 700 during the first three months of 2013.

Anticipating this shift, software companies developed algorithms to help predict supply and demand fluctuations and power electronics manufacturers developed new technology to help grid operators deal with intermittent production. Several manufacturers have been working on solar inverter technologies. Technology challenges are being addressed and advancements will continue. I’m not confident, however, that utilities are preparing in other areas affected. I received an article pitch this week that describes “the conflict between utilities and solar that’s brewing (raging in some places) around the U.S.” The expert who offered the article is the CEO of a clean power finance company touted as one of the only companies in the solar finance sector that works with utilities to channel their capital into distributed solar assets so utilities can access new revenue streams. The CEO thinks solar represents a threat or major new opportunity for utilities. He refers to utility holding companies’ attitudes toward solar like military parlance; on military maps, you have reds, yellows and blues (unfriendlies, neutral/unknowns and friendlies). He even named a friendly and unfriendly utility.

Using military parlance might be a little extreme, but utilities can resist or embrace solar; they can’t ignore it. The stats I mention reveal that customers aren’t as entrenched in the current paradigm as utilities. Customers will choose based on needs and budgets. Utilities must be ready to serve these customers or they might be labeled “unfriendly” and be left behind.

alt   Editor in chief
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