NRG leading business model sea change for generators

NRG buys residential rooftop installer

NRG Energy, one of the country’s largest power generators and electricity retailers, purchased one of the country’s biggest residential solar companies last week, making the utility a leader in adapting its business model to the changing energy landscape.

NRG announced that it purchased New Jersey-based Roof Diagnostics Solar last week. The solar installer, which has more than 475 employees across the country, will now operate under the name NRG Residential Solar Services.

In a time when most utility companies and power generators are fighting distributed rooftop solar and appealing to public utility commissioners to eliminate or strip down net metering benefits, NRG’s move is uncharacteristic.

Utilities in nine different states have asked regulators to gut net metering programs or to allow them to control the distributed solar market under their existing monopoly model. Some of the arguments are ongoing, but regulators in most states have already squashed utility efforts to undermine rooftop solar expansion.

In Hawaii, home and business owners have found such benefits in solar that they are defecting from the grid and the local government is considering legislation that will force the utility to adjust its business model to allow more solar installations while continuing to provide grid connection services.

Even in the face of necessity, the utility resists changing.

In a world where utility companies are deeply entrenched in their old business models and reluctant or slow to change, NRG stands out.

The company has said for years that it aims to shift its focus toward more renewable energy and distributed generation. It’s one of the only major generation companies in the country proactively adjusting its business model to adapt to the changing energy landscape.

The addition of the residential solar installation service sets the company further apart from its peers and its utility customers that buy the electricity it generates as a forward-looking company.

 “With residential solar sales expected to take off in the next few years, NRG wants and expects to meet the demand of Americans in every state who are seeking to benefit from the inexhaustible supply of clean energy provided by the sun while affording themselves greater independence from an increasingly less reliable electric grid,” NRG CEO and President David Crane said in a statement.

The fact that the power generator promotes its new product while predicting the demise of its old ones is exceedingly uncharacteristic, especially for a company that still uses coal, oil and natural gas to generate the majority of the power it sells.

NRG seems aware, in a way that its competitors aren’t, that power generators and competitive power providers will eventually be selling solar and other renewable generation directly to the consumer rather than selling traditional generation through utilities.