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Has the "Death Spiral" for Electric Utilities Started?

image credit: Renewable Energy Institute

Monty Goodell, MBA's picture
Executive Director Renewable Energy Institute

Co-Founder & Executive Director Renewable Energy Institute Jan 2005 – Present Austin, Texas The Renewable Energy Institute (REI) is a non-profit company that is "changing the way the...

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Has the "Death Spiral" for Electric Utilities started?

1.  Solar Energy Systems and Rooftop PV panels become more efficient & less expensive each year.

2.  Each year, increasingly more and more homeowners & building owners install them.

3.  This results in lower kWh sales (and revenues) to each respective Electric Utility the year after the
installation of these Solar Energy Systems.

4.  The lower revenues causes electric utilities to raise their electric rates at a faster rate.

5.  Those electric utility customers remaining are "shocked" by their electric utility bills and install
their own Rooftop PV systems! Utilities begin moth-balling highly-inefficient/polluting "central power
plants."  Solar Energy Systems and "Decentralized Energy" / "Distributed Energy Resources" along with
local / community Micro-Grids plus "Non-wires Alternatives" begin expanding at an increasing rate.

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6.  Repeat steps 1-5 above.

7.  Cities and states like Austin, Texas, Burlington, Vermont and the State of California enact "Net Zero
Energy" mandates for new home construction wherein new homes that are built consume the mostly "brown
electron" from the electric utility as a back-up, such as after the sun sets, or during inclement weather.
This results in no "new" revenues for the electric utilities.

8.  More and more homeowners and business owners begin installing their own Net Zero Energy systems (and Net Positive Energy systems) - some with Battery Energy Storage systems, that are integrated into the
local Micro-Grids.

8.  Repeat steps 1-5 above.

9.  Batteries, like Solar PV Panels, are also increasing in efficiency and decreasing in price every year
so more and more homeowners and business owners begin installing their own Battery Energy Storage systems along with their new Solar PV Panels, Net Zero Energy systems and Net Positive Energy systems.

10. Repeat steps 1-5 above.

The "Death Spiral" for electric utilities is complete when "Buildings as Power Plants" - which are, by this
time, "Net Positive Energy" systems - wherein the surplus power produced is exported to the local Micro-Grid
and integrated into community Micro-Grids - which is the new norm.

The only vestige remaining of electric utilities is the wires / T&D.

Monty Goodell, MBA's picture
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Matt Chester's picture
Matt Chester on Mar 20, 2019

This is an interesting though experiment, though of course simplified. Do you predict this type of trend would actually come into fruition? I would think that were anything like these dominos to start to fall that regulators would step in to make sure institutions in the utility industry were not relegated to the fully realized death spiral

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