Traditional utility companies know that the distributed generation of solar energy threatens their business models.
Edison Electric Institute, an industry trade group, acknowledged its current situation is similar to the crossroads at which the telecommunications sector stood a decade earlier. Bell Atlantic, which later became Verizon, and other telephone companies thrived when they switched to a more widespread technology better suited to people’s lives.
BellSouth, NYNEX, and Ameritech, once large corporations controlling significant portions of the U.S. telecom industry, are now all but forgotten, with most being absorbed by AT&T or Verizon.
Bryan Miller, president and vice-president of public policy at Sunrun and TASC, said that the problem facing utilities was significantly more complex than what the telecommunications sector faced because of the many overlapping regulations and different regulating agencies for utilities. Telecommunications was transformed by federal law. Utility logistics could be more specific, which may explain the utility companies’ unwillingness to be proactive.
Utility companies can still embrace this new technology, which is here and now. Most utilities decide to fight the technology.
Miller stated that utilities need to stop fighting. Miller said, “They must stop fighting against computers like the typewriter lobby.”
He said that some utilities have tried to test the water with their distributed generation programs, which is precisely what intelligent utilities should do. Only some utility companies are investing meaningfully in distributed generation. Edison International applied to the FERC for approval on June 25, 2015, to purchase SoCore Energy. This Chicago-based company specializes in solar energy installations. Duke Energy recently announced a significant growth equity investment into Clean Power Finance in San Francisco, a financial services and software provider for the solar industry.
According to the Solar Electric Power Association, Edison International recently invested in Clean Power Finance, and NextEra Energy Resources purchased Smart Energy Capital. This company develops and finances distributed generation solar power.
In a press release, Julia Hamm said that the investments made by Edison International, Duke Energy, and NextEra into distributed solar companies show that these companies are forward-thinking. They recognize the importance of solar in the energy industry. Customers are being offered more and more energy options, including solar. This indicates that the role of electric utilities is changing. Utility holding companies are preparing for the future and getting ahead of change.
According to an article published in the Wall Street Journal on May 28, companies like American Electric Power are considering getting into distributed generation.
Nick Akins is the chief executive officer of American Electric Power. He told The Journal, “on its face, you’d look at it as a threat.” “But we also see it as a chance because our business has changed.” It’s inevitable.