The picture above is a solar generation facility in the United Arab Emirates that is owned and operated by the local electric company that services Abu Dhabi. It was cheaper to build this facility than to construct a generation plant that would burn fossil fuels.

Solar facilities require less workers, with zero ongoing fuel costs. The typical coal generation plant costs over $2 billion dollars to build, a comparable solar facility is a far smaller capital investment.

As I’m out and about selling solar and talking about green tech with homeowners and business people I sometimes get this question: “What will happen to the electric utility when everyone gets solar?”

Some homes will never get solar. Either the roof faces the wrong direction, the home is surrounded by shade trees, or the homeowner refuses to invest in the equipment.

Many homes are owned by large real estate investment funds and will always be rented out to tenants, so the landlord has zero incentive to install solar since the tenant is responsible for the electric bill.

Even if the electric company jacks up rates there will still be stubborn luddites who reject solar, for the same reason that people will still drive gas guzzling cars and SUVs even after the local Exxon station starts charging $10 per gallon.

For these reasons the electric company will survive, but they will have to adjust and adapt their business model as more rooftop solar comes online. As the utility implements more solar their long term costs should go down, making power from the grid less expensive.

Ben Alexander

April . 2017