Elon Musk believes solar and utilities can exist together, despite uneasy feelings among many within the utility sector.
Speaking at the Detroit Auto Show, Musk said that expanding electric vehicle markets, along with businesses and homes as solar power generators, will change how we view electricity demand.
“As we transition to electric transport, we’re going to see a significant increase in the demand for electricity,” SolarCity’s chair and Tesla’s CEO said, hinting that utilities will have a good future.
Musk told the Detroit press conference that he sees future electricity demand doubling. Half of supply would come from solar while half would come from the current utility, while the demand from current utilities would remain more or less unchanged.
In 2015, the US Energy Information Administration predicts large-scale generators will create less electricity than in 2007, even with steady economic improvement. Along with declining solar costs, it’s understandable why consumers may want to go off grid.
With solar’s rise, many US utilities have raised concerns of possible declining market share and increased grid maintenance costs. Interest groups have worked hard to disrupt solar’s momentum, including lobbying for solar tariffs. Utilities argue this helps keep up the current grid, and not pass costs on to normal, customers. Solar advocates would argue these “taxes” discourage consumer from going solar, and fail to note or value several benefits to the grid and society that come from distributed solar power. Unfortunately, some states have taken regressive action. Oklahoma signed a bill last spring allowing state utilities to charge higher rates for solar rooftop owners, compared to normal customers.
Disruptive technologies, like solar power, are now making utilities think how their business model can work in the 21st century. This same situation occurred when the Internet disrupted other sectors (including music and print media).
Utilities now face some unique challenges, including climate change, but they can take advantage of solutions like electric vehicles in order to survive.
Lyndon Rive, the CEO of SolarCity, told The Financial Times that it’s critical to have a grid, and that people misperceive what they are attempting to do at SolarCity.
“When you’ve had a monopoly for a hundred years, and you’ve never seen change, change may seem like death to you,” Rive said, suggesting utilities are seeing a “change spiral” now within this sector.
Utilities will have to change, to meet the growing demand for sustainable energy alternatives from customers. At the same time, Musk’s (and Rive’s) view is that utilities and solar companies co-existing is not out of line.
The question is, are utilities now willing to meet the rapidly changing energy landscape?
