The costs of batteries and solar panels are continuing to come down. That's according to a new report from the Rocky Mountain Institute (RMI) and HOMER Energy that came out this week. It's could spell bad news for traditional utilities that will have more work cut out for them to retain their customers as it becomes easier for them to go solar. But, as with most things the RMI does, it explored ways that utilities can remain relevant when consumers have other options.
The report, The Economics of Load Defection, discusses how solar arrays with batteries that are connected to the grid can supply the majority or customers' needs that the grid would otherwise have provided. The report found that within the next 10-15 years solar systems with batteries will become increasingly affordable in most geographies.
“These findings should be compelling for customers and technology providers,” said RMI Principal and report author James Mandel. “No matter how expensive retail electricity gets in the future, customers that invest in these grid-connected systems can contain their electricity costs at or below a ‘peak price,’ yielding significant savings on their monthly utility bill.”
That’s great for energy customers. But it’s a challenge for utilities, which have been providing the same type of service and billing procedures for more then 100 years. The report found that even if only a fraction of customers adopt solar panels with battery storage it will impact utilities’ sale and investments in infrastructure and maintenance. The report estimated that by 2030 residential and commercial load defection could total 140 million megawatt hours, costing them $35 billion per year.
“This is not all risk,” explained RMI Manager and report coauthor Leia Guccione. “Because these solar-plus-battery systems are grid-connected, they can offer value and services back to the grid. We need not see them only as a threat.” The report, which used HOMER’s software system, discussed how much electricity load and revenue loss utilities could face, including implications for utilities and regulators and possible paths forward.
The report is different than The Economics of Grid Defection, a 2014 report that looked at off-grid solar-plus-battery systems. Such systems employ larger battery systems than grid-tied systems—but they also cost much more. The new report focusses on the less expensive systems with smaller batteries, which makes them much easier for customers to afford.
“Today’s electricity system is at a metaphorical fork in the road. Down one path are pricing structures, business models and regulatory environments that favor eventual grid defection,” said Jules Kortenhorst, CEO of Rocky Mountain Institute and Carbon War Room. “Down another road, those same factors are appropriately valued as part of a transactive grid with lower system-wide costs and the foundation of a reliable, resilient, affordable and low-carbon grid of the future in which customers are empowered with choice.”Tweet