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Why Energy Utility Companies Are Inherently Against Solar


I recently read a news report about Faith Community Church in Greensboro, North Carolina who installed an “illegal” third party solar array. The array itself is a little over 5 kilo-Watts which is relatively small. The idea here is that the installer has installed the solar array on the church for free and will sell the church the energy it produces for half the rate the regional energy company Duke Energy charges. Even though this array only produces a mere fraction of the Energy the church requires, they have attracted the attention of the all-mighty Duke Energy (a massive energy utility in the south) and will likely be “Duking it-out” in court. So what gives? Why is this illegal in North Carolina? Why does Duke Energy even care?

The solar array itself is not at issue in this case. It is the method at which the church intends to obtain and use the array. Here’s the concept, it’s the same idea of one very successful Elon Musk of Solar City (and Tesla Motors), an international solar company which offers significant savings while providing the choice of solar to thousands of homes and businesses across the country without the huge initial investment home owners would otherwise have to make in purchasing a solar array themselves. This business model is actually illegal in North Carolina. This practice is only illegal in four states. Duke Energy is an energy provider in three of these four states.

In fact, solar and alternative energy sources in general present an adversarial challenge to just about all regional utility power companies. In fact, the idea that you would want to place a solar array, wind turbine, or geothermal system on your residence, business, or church property is a direct threat to the power company. But why?

Like most things in life, adversity to change is about one thing. Money. The utility’s bottom line is at stake. When that company is accountable to share holders and not the community, it will always prioritize shareholders. Let me break this down. Here are five observations about utilities behaviors towards alternative energy.

1. Decentralized energy sourcing requires new smart grid infrastructure

The electric grid as we’ve known it for the last hundred years is primarily a one way street. Power flows from the plants, through the lines to a substation and then to your home and business. When you say that you would like to produce your own power and contribute to the grid, that is a problem. Power only flows one way. In order to get it to flow two ways, utility companies have to invest in smart grid technology and update their infrastructure.

2. Investment in smart grid tech isn’t cheap and it hurts their bottom line.

If a company is racking in profits year over year, do you think they want to fix what to them isn’t broken. In their opinion, they are still reaping the investment of the first grid infrastructure they created regardless of how outdated it is.

3. Regulations and legislation isn’t doing enough.

The governments know that utilities have no incentive to change and upgrade their infrastructure so they’ve created alternative energy minimum mandates that require utilities to maintain a certain amount of alternative energy sources in the grid. Power companies are fighting behind the scenes to ensure that this percentage is as small as possible and that they have control over where they get this alternative energy. Their preference would be to source their alternative energy from just a few Mega solar and wind farms rather than from rooftop solar and community wind projects. Why? Fewer connections means less two way upgrades. In fact, a solar farm doesn’t require two way smart grid operation. It acts like any other energy plant. So while you see commercials about how your utility is “embracing” alternative energy and the “future” or energy, behind the scenes, they are fighting to maintain control over how, when, and who can create it.

4. They are re-writing the laws themselves.

It’s a tragedy that some of the states with the most potential for solar have the worst solar friendly policies. Instead of investing in smart grid technology, they invest in lobbyist that are campaigning behind closed doors to roll back the new alternative energy standards by specifying who can produce energy for the grid, how much (caps), and what that energy is worth. If they have control of these elements, they in effect can de-incentivize the public interest in solar and then things will go back to the way they were and they can get back to endless profits.

5. Utilities are slow walking any changes.

To give their lobbyist time to reverse the laws and regulations for alternative energy portfolio, they are slowing the process for interconnection. You could purchase a solar array today and it not be connected to the grid for months. They make the paper work full of legal jargon and there are confusing steps and fees. The interconnection process is a mysterious one that few can navigate. In the meantime, their marketing teams are busy highlighting the “progress” they are making towards implementing alternative energy. Just remember, they want it centralized from specific plants, not from your home and they don’t want too much of it.

Don’t let big energy’s marketing machine fool you. These companies are against alternative energy. Check on your elected officials to see who they stand with. The company or the community.

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