Onsite Generation: Can Utilities Rethink Their Business Proposition?

Onsite Generation -  Can Utilities Rethink Their Business Proposition

Can utilities adapt to emerging innovations that allow customers to “bypass” their services? Or, will power companies become the modern-day dinosaur?

The trend is toward more independent customers who are able to generate their own electricity — all spearheaded by advancing technologies that are becoming cheaper and more effective. But just how all it all “ends” cannot yet be forecast.

In its report, “The Economics of Grid Defection,” the Rocky Mountain Institute says that the transformation to onsite generation is inevitable. Rooftop solar panels are the main catalyst: Falling prices and financing by third parties in combination with continued government supports are all promoting development. The missing component, it says, is a reliable and affordable battery technology, which can store the electrons and then release them later on.

“We looked at solar plus battery systems and already, the economics are getting better,” says James Mandel, manager at the think tank and an author of its report, in an interview. “The optimal investment for these is in concert with the grid, which we believe will lead to cheaper central generation too.”