What Your Solar Customers Need to Know About Utility Companies

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July 21, 2015 | By RGR Marketing Blog

Solar Power vs. Conventional Power from Traditional Utilities

Investor-owned utilities have had an effective monopoly going for nearly as long as we’ve had electric lights in our homes. But the advent of affordable photovoltaic systems has the potential to disrupt their business model in a major way, and in many markets, it’s already doing just that.

And while many utilities are recognizing the benefits of adding solar and other renewables to their own energy production portfolios, they’re less enthusiastic about rank-and-file electricity consumers producing power on their own.

What Is Net Metering?

Many solar households produce more electricity than they actually need during peak production hours, and some states’ net metering policies allow them to sell their excess electricity back to the utilities at retail rates.

At night, those same consumers use more energy than they produce, so they purchase electricity back from the utilities.

At the end of each billing cycle, the amount of electricity these solar adopters have pumped back into the grid is subtracted from the amount they’ve drawn from utilities, and as a result, many solar customers end up paying little or nothing on their monthly electricity bills.

How Utilities Work

Investor-owned utilities serve two main purposes. The first is to provide electricity to their customers, and the second is to provide their investors with the best possible ROI. Here’s how their business model works.

First, they estimate how much energy they’ll need to generate. Then, they calculate the cost of the infrastructure investments needed to produce that electricity. Next, they figure out how much they’ll need to charge consumers to cover costs and turn a profit for their investors. Finally, they get those rates approved by the state utility commission.

The Utility Argument

Utilities claim that net metering policies allow consumers to sidestep paying their fair share of utility grid infrastructure maintenance costs. After all, they’re still using the grid to sell their power back to the utility, and to draw current from the utility during the evening and nighttime.

As a result, utilities say they’ll have to raise rates for their other customers to compensate. Thus, net metering is bad for consumers, or so the argument goes.

Since When Are Utilities So Altruistic?

The utilities are trying to spin their argument to make it seem like they’re looking out for customers, but as anyone who has ever sat on hold for 30 minutes with a utility can attest, altruism isn’t necessarily their modus operandi.

Solar advocates say the real issue is that utilities are seeing their long-standing monopolies compromised by a disruptive technology, so they’re doing the best to stand in the way of progress.

That’s why they’re railing against net metering laws and trying shape public policy so it better fits their business model.

They’ve proposed a monthly service charge that all customers would have to pay, whether or not they had actually used any utility-produced power. They’ve also hinted at changing net metering policies that would compensate distributed energy customers at wholesale, rather than retail electricity rates.

Net Metering Benefits Utilities

Solar proponents say net metering actually benefits utilities more than they’d like to admit. Distributed energy customers actually lower utility infrastructure costs. They also allow utilities to purchase clean power that helps them meet their RPS goals. Not only that, but utilities lose less power during transmission when it’s produced and close to the point of use.

The Battle Isn’t Over

Solar energy has been growing by leaps and bounds, and it seems poised to continue doing so. Whether utilities like it or not, times are changing. Some will adapt, but others seem intent on being dragged, kicking and screaming into the bright future of energy production.

If you're a solar installation company owner and you've been thinking about buying solar leads to supplement your marketing efforts, don't delay any further -- get in touch with RGR Marketing today, and get your hands on the best solar leads in the industry.

[Photo Via: CleanEasyEnergy]

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Solar Power vs. Conventional Power from Traditional Utilities

What Is Net Metering?

How Utilities Work

The Utility Argument

Since When Are Utilities So Altruistic?

Net Metering Benefits Utilities

The Battle Isn’t Over

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money today!

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Solar Power vs. Conventional Power from Traditional Utilities

What Is Net Metering?

How Utilities Work

The Utility Argument

Since When Are Utilities So Altruistic?

Net Metering Benefits Utilities

The Battle Isn’t Over

Start making more money today!

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