Solar companies alliance preps to battle utilities

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TASC preps to fight utilitiesA group of some of the largest rooftop solar companies in the country that would normally compete against each other for customers have formed an alliance in preparation for a fight against utility companies that feel threatened by the growth of distributed generation technologies.

SolarCity, Sungevity, Sunrun and Verengo – all known for their solar leasing models – announced this week that they have formed The Alliance for Solar Choice or TASC.

The language of the new organization’s press release is a clear battle cry.

“TASC is committed to protecting the choice for distributed solar,” the release reads. “Monopoly utilities are trying to eliminate (net metering) to halt the consumer-driven popularity of rooftop solar, which is helping create thousands of local jobs around the country.”

While the message is decidedly defensive at a time when there have not been big headlines about utilities attempting to do away with their net metering programs, which allow utility customers to claim credit for the power they generate on their electricity bills at retail rates, there is good reason for the industry to begin preparing for a fight.

Earlier this year, the Edison Electric Institute, a trade group representing most of the country’s investor-owned utilities, released a report titled: “Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Energy Business.”

While the report acknowledged that utilities and investors weren’t talking about the long-term implications that distributed generation technologies like solar photovoltaics and battery storage could have on utilities, they should be.

“As the cost curve for these technologies improves, they could directly threaten the centralized utility model,” the report reads.

In addition to the threat posed by distributed generation – particularly solar – the report notes that energy conservation efforts could diminish demand for electricity, leaving utilities with too much capacity and not enough customers.

That’s a problem that is likely to get worse and worse over time, according to the report. Solar is only a viable economic alternative to grid power in certain markets where electric rates are higher right now. But as costs continue to fall, the threat will spread. And what happens if energy storage technology catches up?

“While we would expect customers to remain on the grid until a fully viable and economic distributed non—variable resource is available, one can imagine a day when battery storage technology or micro turbines could allow customers to be electric grid independent,” the report reads. “To put this in perspective, who would have believed 10 years ago that traditional wire line telephone customers could economically ‘cut the cord?’”

To address the issue, the report recommends “eliminating cross-subsidies,” which seems to mean pushing back on utility rebates for competitive technologies and doing away with net metering programs.

Enter TASC.

“Without consumer choice and empowerment, the utilities will continue to increase their rates and profits,” said TASC member and SolarCity CEO Lyndon Rive.  “If Americans are denied the right to choose how they produce and consume electricity, monopoly utilities will continue to choose their profits over the interests of consumers.”