Experts: Solar Power Could Soon Pose Economic Threat to Electric Utilities
July 07, 2014 5:44 PM
After decades as an expensive and sometimes impractical source of energy, experts say solar power is finally coming into its own. Not only has the technology improved the efficiency and cost of solar panels, in some states, rising prices for conventional electricity make solar panels an economical alternative. But can solar power actually compete with conventional electric utilities?
John Desmarteau waited 10 years before switching to solar, but the retired Washington physician is glad he did.
He says he's cut his reliance on the electric company by 85 percent, and saved the equivalent of more than 200 trees.
“In fact, for the last two months, which would be April and May 2014, we’ve used from our electric utility, no electricity," said Desmarteau.
The 39 photo-voltaic panels installed on Desmarteau's roof generate three times more than he consumes even with the air conditioning at full blast.
It's not just a greener alternative - for some it can mean real savings. The industry is still evolving but AstrumSolar's Mark Manthy says companies like his are making it easier for consumers to switch.
"In most markets right now, especially up and down the [U.S.] East Coast and the West Coast - you could put solar panels on your house for no money down. Somebody else owns them, you pay them a monthly payment that is cheaper than you would pay your utility," said Manthy.
In many states, brown energy - electricity generated from polluting, non-renewable resources like coal - is still cheaper than solar. But green advocacy groups such as the Rocky Mountain Institute say that's changing.
“In our most optimistic case that we analyzed, all customers in the Southwest, in the states of California, Arizona, New Mexico, Colorado and Utah would see favorable economics within 10 years and 90 percent of the customers in the Mid-Atlantic," said RMI's Jon Creyts.
Some will not wait that long. American University in Washington just signed a 20-year deal with solar pioneer Duke Energy. AU’s Chief Financial Officer Doug Kudravetz says the long-term savings are substantial.
“We’ve done quite a bit of financial modeling and if brown power goes up five percent a year, we’ll save about $14 million, present value," he said.
Barclays Bank believes solar is a big enough threat to the status quo that it downgraded bond ratings for electric utilities. The group's trade association, Edison Electric Institute, declined to comment. But energy blogger Andrew Ricci believes the threat is overblown.
"Again, I think that the industry sees it as a drop in the bucket in terms of our overall power needs," he said. And, he says he only sees that changing a long time down the road.
While solar power makes up just a fraction of the world's total energy production, some believe the adoption rate will grow exponentially as climate change concerns drive the technology and consumers towards non-polluting and renewable resources like the sun.
No comments:
Post a Comment