For most of his career my Dad worked at a nuclear reactor in southern New Jersey, previous to that he was a lineman for PSE&G, the main electric utility in NJ. Now that I’m in the solar business with Tampa Bay Solar we have some interesting conversations; not only about energy, but also about electric cars and some of the other changes coming down the line.
The traditional electric company business model was to generate and deliver electricity. Most of the power in the United States comes from a mix of nuclear, coal burning and now natural gas burning generation facilities.
Some areas use hydroelectric, the generation facilities near Niagara Falls generate 2600 megawatts per hour, but hydroelectric facilities need a large source of falling water to be effective. The electric company is pretty good at generation and delivery, and the had a monopoly on your dollar for the last 120 years.
Out of 100 million homes across the United States about 1% currently have some form of rooftop solar. Here in Florida the systems that we sell generate power from about 10AM to 6PM (depending on the season) and some of that power gets sent back to the grid via a bi-directional meter.
If you do not have solar (yet) your meter only measures power from the electric company to YOU, with a bidirectional meter you can send kilowatts back to the electric company for a 1 for 1 credit. My Dad has a small 14 panel system on his roof, last month his system pushed about 75 kilowatts (kW) back to the grid.
Dad still has to pay a minimum fee of $31 per month to the electric company, because his system draws power from the utility at night.
This is also known as net metering, and it works really well here in Florida.
As more homes install rooftop solar there will be a need for energy storage during the peak daylight hours, and one way to implement this is through the use of plug in electric vehicles. My 2013 Volt has a 16 kilowatt battery, the newer Tesla models have 100 kilowatt batteries, and in the next few years cars with 200 kilowatt batteries (or larger) will become commonplace and affordable.
An affordable electric car with a 200 kW battery will have a 500 mile range per daily charge. These cars will be expensive as new models (in the $30,000 range) but on the used market they will go for the same price as a used 4 cylinder car like a Camry or Accord.
Imagine several million cars plugged into the grid on a daily basis with 200 kW of storage capacity. Some of these vehicles can charge at night (when electricity is cheaper and more plentiful) and sell back to the grid during peak usage.
My point? We still need to the electric company to move power from rooftops to charge stations to the rest of the grid.
The electric company in 2050 will manage the flow of energy, probably in some type of open marketplace that trades energy credits back and forth. Your car can sell 50kW back to the grid during the daytime, so will your rooftop solar. At night you can get those credits back.
I don’t mind paying a fixed monthly fee to the grid, especially if it allows me to sell energy back to the system in peak demand times.
Some homes will never have solar, either because the homeowner refuses to install it or there is too much shade around the home. Older homes in communities with mature trees are normally not viable for solar. This is why we market to newer communities, normally with 2 story homes in the $300,000 to $500,000 range; higher rooftops, higher credit scores, a more educated demographic.
In the next decade the electric company should see an increase in demand as more electric cars replace gas powered vehicles. Some of that demand will be met by rooftop solar, but many electric vehicle owners will live in rental properties, and landlords will not in invest in solar if the tenant is paying the electric bill. Why would they?
Demand for electricity will also increase as new communities are built. In my part of Florida there is new residential and commercial construction all over the place.
The traditional electric utility will have to evolve, and the best way to do that is to add value to the marketplace in such a way that your customers don’t mind paying a modest fee on a monthly basis.