The prospect of cheap solar panels combined with powerful batteries has been a source of significant anxiety in the utility sector. In 2013, the Edison Electric Institute, the trade group for investor-owned electric companies, issued a report warning that disruption was coming. “One can imagine a day when battery storage technology or micro turbines could allow customers to be electric grid independent,” the report said, likening the speed of the coming transition to the one from landlines to cellphones 10 years ago. Suddenly regulated monopolies are finding themselves in competition with their own customers.
Utilities have been anxious about this for years
They haven’t had to deal with this on the residential side yet, primarily because people can sell excess power back to the utilities at fairly high rates — a practice called net metering. But that’s hurting utilities, too, and some have tried to lower the price at which they buy back power, which has been met by furious protests from people leasing panels. If utilities lower the buyback rate too much, however, and batteries get cheap enough, people may just unplug from the grid altogether — or more likely, install systems that let them rely on it only rarely — prompting what those in the industry call “the utility death spiral.” It’s quite a bind: by fighting net metering, utilities would help make battery storage more economically viable, driving the transition to a distributed grid.