A recent report out of the USA says widespread customer defection from the mains grid is possible by 2025 thanks to solar PV and energy storage.
The report, from Rocky Mountain Institute (RMI), HOMER Energy and CohnReznick Think Energy (CRTE), states a considerable number of consumers will likely see favourable “defection economics” within a decade.
The ongoing reduction in solar panel and battery storage costs combined with increasing retail electricity prices has already seen grid parity achieved for commercial customers in Hawaii.
“Solar-plus-storage represents a fundamentally new paradigm,” said RMI Managing Director Jon Creyts, PhD.
“While other distributed generation options still require some degree of grid dependence, solar-plus-storage provides an opportunity for customers to cut the cord to their utility entirely. To remain competitive, utilities need to understand how to leverage hybrid systems within the electricity system.”
The analysis focuses on five representative states – New York, Kentucky, Texas, California and Hawaii – and points out the timeframe is well within the 30-year planned economic life of major power stations.
“Such parity and the customer defections it could trigger would strand those costly utility assets,” states the report; which warns even early adopters could undermine the traditional business models of energy utilities.
It says solar and energy storage grid parity will likely arrive before 2030 and potentially as early as 2020 for tens of millions of commercial and residential electricity customers in the five states.
The first instalment of the Economics Of Grid Defection can be downloaded here (free registration required). The second instalment of the report will examine how utilities can stay viable in the face of the disruption to their business models and how to and unlock opportunities.
“Properly regulated, these hybrid technologies can be a benefit to the larger grid, rather than a threat as they are sometimes depicted,” said HOMER Energy CEO Peter Lilienthal, PhD.
