If more people go solar

Great question;  one we just asked of Green Mountain, on a radio interview, a utility company speeding ahead with a partnership with Tesla on storage.  They believe their primary future is as a smart grid;  a great manager of energy that insures consistent access to clean, redundant power for generations.

We wonder how other utility companies answer that?

If more people go solar, what will happen to the grid?

Wind turbines, solar panels and backup batteries provide plenty of power for Kenneth Viar’s home and workshop in rural Virginia — yet each month he still buys a few dollars’ worth of electricity from the local utility. “There’s nothing better than grid power,” Viar says.

“Grid defection” – the idea that solar-and-battery technology will lead people to cancel their electric service – is a growing concern in the utility business. But utilities can take solace in the fact that early adopters like Viar still find the grid useful. It offers backup power and a place to sell their excess home electricity production.

Home solar and other off-grid technology is about to have its day. Tesla  Chief Executive Elon Musk’s announcement April 30 that his company would market $3,000 home batteries that can store solar power for nighttime use is just the latest twist in the rapid evolution of systems that will let homes and businesses unplug from utility companies.

Tesla’s $3,000 price point surprised experts at the Rocky Mountain Institute, a green-energy think tank which has studied grid defection. “We were expecting a similar product in the $15,000 range,” said Jesse Morris, a manager in RMI’s electricity practice. The low price means “more potential for load- and grid-defection, in more places, sooner.”

Wall Street analysts have said for several years that solar-and-battery might revolutionize the electricity business. And utility regulators fear enough people might defect from the grid to slash utility revenues and worsen service for those who stay.

“Customers will drive markets, and if the existing regulated markets do not provide choices that customers want or need, customers will eventually find alternatives,” warns New York’s Public Service Commission, which is reforming its rules to accommodate the new technology.

But even as solar-and-battery technology improves, the grid will remain useful, said Mark Cerasuolo, marketing director for OutBack Power Technologies, which sells electronic equipment used to operate home generating systems.

© Mario Anzuoni/Reuters Vivint Solar technicians Eduardo Aguilar (L) and Ian Boshard install solar panels on the roof of a house in Mission Viejo, California October 25, 2013. REUTERS/Mario Anzuoni (UNITED STATES - Tags: ENERGY) 

“I think the big area is going to be this third ground, the middle ground,” Cerasuolo said. “People are putting off-grid technology in their homes. They are off-grid when it makes sense, but they dip back into the grid when they need to.”

Cerasuolo’s idea of what the power system will look like is backed by a new Rocky Mountain Institute study.

Over the next 10 to 15 years, the cost of solar-plus-battery systems will make them economical for homeowners in all 50 states, the study says. Solar-battery setups are already economical in parts of Hawaii, which struggles with sky-high electric rates.

By 2030, Westchester County, N.Y. — another place with high power prices — could get 75% of its power from home and business solar-and-battery systems, RMI says. By 2050, the study says, solar-and-battery power will run 95% of the county’s businesses.

Because the grid offers backup power and a place to sell excess power, staying connected makes solar-and-battery more reliable and economical, said James Mandel, a co-author of the report. “Solar-plus-storage systems will have the best value and economics when they can interact with the grid,” he said.

Viar, of Chesterfield County, Va., would be a target customer of Tesla’s systems if he hadn’t already poured thousands of dollars and his own sweat equity in his solar- and wind-powered home.

Viar, a disabled Marine Corps vet and union boilermaker, powers his 1,500-square foot home and separate 1,100-square foot workshop with two wind turbines mounted atop 20-foot masts, and 20 2-by-5-foot solar panels on his workshop roof and on the ground nearby. There’s also a battery backup system to keep his lights, appliances and electronics humming when there’s no solar or wind power.

Viar said he bought the panels in 2009 for about $400 apiece. Today he figures he could buy the same panels for $140 each. Forced to choose between solar and wind, Viar said he’d take solar. It’s an easy call. Where he lives, the wind doesn’t always blow. But he’s found that his solar panels produce power even on cloudy and rainy days.

He takes power from the grid when he needs it. His bills are small — in March, his utility, Dominion Virginia, billed him $15.95. “I burned 45 kilowatt hours,” Viar said. “My neighbors burned 1,500 kilowatt hours.”

When weather knocks out Dominion’s power grid, Viar’s batteries and wind and solar generators give his home lots of electricity.

“It’s a win-win situation,” Viar said of the home-and-grid setup.

Even if people with solar-and-battery systems stay on the grid, they’ll use less grid electricity. How to fund the grid as sales shrink puzzles utilities and regulators.

“It’s going to be hard for utilities to be made whole in this transition,” Mandel said. “But I do think there is a set of outcomes that is much better, where utilities remain relevant and evolve into providing new services. There’s a risk that utilities won’t do enough in time.”