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Utilities Grapple with Rooftop Solar and the New Energy Landscape; first steps toward decentralized energy

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…The combat trope isn’t entirely wrong. The utilities have successfully waged battles to squelch rooftop solar in states such as Arizona and Indiana, mostly by wielding political muscle to reduce compensation to customers for electricity fed back into the grid. This has helped hobble solar companies, and after four years of growth that averaged 63 percent a year, U.S. rooftop solar growth dropped to 19 percent last year, and this year is projected to be flat.

But the metaphor begins to break down here, since utility company opposition isn’t the only reason for the slowdown in rooftop solar. According to Shayle Kann, head of Greentech Media Research, a leading electricity market analysis firm, two of the nations’ three biggest rooftop installers, SolarCity (now owned by Tesla) and Vivint Solar, shifted the emphasis of their business models from growth to profitability. In addition, in California, home to nearly half the nation’s rooftop installations, rooftop’s growth has tapered off as solar companies have run out of early-adopter customers. In any case, the decline is almost certainly temporary: GreentechMedia projects that rooftop solar’s growth in the coming years will rebound to a healthy 10 to 15 percent annually…..

…For all the conflict surrounding rooftop solar, solar energy last year generated just under 1 percent of U.S. electricity, and utility-scale solar farms have three times the generating capacity of residential solar installations. That disparity is likely to grow.

While the shift to rooftop solar and other distributed energy sources presents a major technological challenge to utilities, their current business models provide them no incentive to meet it.

…“It’s not just the utilities that need to change their business model,” Richard Kauffman, New York’s “energy czar” and REV’s leader, said in a telephone interview. “One of things we’ve been pleased about is the way that the solar industry has demonstrated a willingness to change its business model. The solar sector is beginning to view the utility not as the enemy, but as a customer and partner, in just the way that the utility needs to start viewing the solar industry.”….

…“the utilities are going to have to either come to the table or they’re going to go out of business.”

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